Are you in the market for a new set of wheels and need financing? InfoChoice’s Car Loan Repayment Calculator can estimate your repayments and see how much interest you could pay over the term of the loan.


How does the car loan repayment calculator work?

The InfoChoice Car Loan Repayment Calculator helps you calculate your potential car loan repayments and the total interest payable. You can use our car loan repayment calculator to help you work out what you can, and maybe what you can't (bye bye Range Rover), afford when the time comes to purchase your vehicle.

Your car loan repayments will depend on the:

  • Type of repayments - Principal and interest repayments versus interest only repayments

  • Repayment frequency - Monthly loan repayments versus fortnightly versus weekly

  • Car loan type - Variable, fixed, or introductory rate

  • Loan term - You can set your car loan term and compare periods from one to seven years

  • Loan amount - Enter the amount you wish to borrow to compare repayments and interest charged

What it doesn’t factor in

Keep in mind the InfoChoice Car Loan Repayment Calculator does not take a couple of things into account:

Fees and comparison rate

Because of this it’s also worthwhile looking at the comparison rate. The comparison rate on a car loan takes into account the fees relating to a loan and expresses it in interest rate form; a high comparison rate usually indicates high fees.

Balloon payment

A balloon payment is an optional feature where you can pay a lump sum of the car’s value at the end of the loan. Anywhere from 10% to 50% of the value is common. So if you had a $50,000 car this would be anywhere from $5,000 to $25,000.

Balloon payments can reduce your regular repayments however this comes with one major caveat: You are still paying interest on the full amount! So because your repayment is lower, less actually goes towards paying off the full amount. On a five-year car loan with a 6% interest rate borrowing $30,000 and a 30% balloon, this would result in around $1,260 extra in interest paid.

What is a car loan and how does it work?

A car loan is a personal loan that can be used to buy a new or used vehicle. A car loan can be helpful if you don't have the full purchase price to buy the vehicle outright, but you can afford to make regular loan repayments.

Typically, car loan terms last up to seven years. During the agreed term, you will be required to repay the amount borrowed, plus interest and any fees.

Your car is usually used as security for the loan - this is known as a secured car loan. In the event you are unable to make your repayments on time, the lender can repossess your vehicle and sell it to recoup any costs.

On the flip side, you may be able to apply for a unsecured car loan. If you default on repayments, a lender will not automatically repossess your car. Sounds like a win, right? Well, the trade-off usually comes in the form of a higher interest rate and ergo higher monthly repayments.

How to compare car loans

New vs used cars

A new car loan is a type of personal loan that lets you finance a brand new car that's under a certain age. New car loans are typically reserved for new, demo, or even lightly-used vehicles.

Whereas used car loans allow you to buy a pre-owned car within a certain age bracket, typically up to around seven years old. If you’re looking for a car older than this you may have to look for an unsecured or personal loan.

Fixed vs variable rates

Fixed-rate car loans give you certainty and make budgeting easier, as the interest rate you’re on will not change for the duration of the loan, even if rates go up. However, if you want to pay out the loan early or refinance, you may incur break costs. Plus, fixed-rates tend to have fewer features than variable loans.

Variable rates mean that the interest rate you pay can change at any time - usually at the discretion of your lender or the RBA’s cash rate. With this comes more unpredictability. However, variable car loans often offer more flexibility e.g. additional repayments without penalty.

Loan term

A longer loan period (the total number of years you will take to repay the loan) may reduce your regular repayments, but increase the total interest charged over the life of the loan. A longer loan also means that your car will depreciate more while still under a finance arrangement.

A shorter loan period may increase your repayments, but will lower the overall interest payable.

Loan features

Some car loan products will offer helpful features such as a redraw facility or making extra repayments. Make sure to ask your lender whether these features come with additional fees on top.

Loan fees

Common fees you may encounter with a car loan include: application fees, account keeping fees, early exit or break fees, redraw fees, or additional repayment fees.

Balloon payment

A balloon payment is an agreed-upon lump sum that you will pay to your lender at the end of the car loan term. For example, if you took out a $30,000 car loan for 5 years at 6% interest and had a (30%) balloon of $9,000, your monthly payments would be reduced from $579.98 (no balloon) down to $451. At the end of the loan term, you would then have to pay the $9,000 sum leftover in full.

While a balloon payment can help lower repayments, you do end up paying more interest across the term of the loan because you are still borrowing against the full amount.

How can I pay off my car loan early?

Paying off your car loan early can save you money on interest and provide financial flexibility.

There are a few options to consider when it comes to paying off your car loan early:

  • Opt for a car loan that allows for additional repayments - Whether it be a lump sum payment such as your tax refund or a work bonus, consider putting this extra cash towards your car loan repayments. You could also chip away at the principal by making small extra repayments every month.

  • Round up your repayments - Round-up your repayments to the nearest $5, $10, or even the nearest $50. Any amount will help.

  • Make fortnightly, not monthly payments: There are 26 fortnights in a year (or 13, four-week blocks) versus only 12 months. By making this simple switch you could save in interest in the long run.

Before you go ahead and make any extra repayments, confirm with your lender if there are any fees applicable as sometimes this could equal or outstrip the savings made by paying off the car loan early.

Car loan FAQs

Can your credit history affect your car loan interest rate?

Yes, your credit score can have an impact on your likelihood of getting approved for a loan and the interest rate offered.

For example, a borrower with a low credit score is generally seen as higher risk for the lender, and as a result, will be offered a higher interest rate (or possibly even declined). Whereas if you have a higher credit score, you’re deemed as a more reliable borrower and thus may be offered a lower interest rate.

What are the additional costs of car ownership?

On top of your car loan repayments, you will also need to pay for some additional costs that come with car ownership. These can include:

  • Stamp duty

  • Fuel

  • Registration & CTP (green slip)

  • Insurance and roadside assistance

  • Fuel

  • License renewal

  • Tyres, servicing and maintenance

  • Fuel

  • Tolls

How much deposit do you need for a car loan?

Most car loan lenders will allow you to borrow up to 100% of the car's value, meaning you may not require any deposit. However, if you want to lower your repayments and therefore the total amount you borrow, a deposit of some kind (say 10%) may be beneficial.