Auto loan affordability calculator

Work backward from a monthly loan payment to an estimated purchase-price ceiling. Enter the payment budget, APR, term, down payment, tax rate, fees, and trade-in details. The result separates the amount the payment can finance from the car price it could support. This tool uses tax on the full purchase price and does not determine loan eligibility.

Starting inputs use official educational examples. Zero tax, fees, cash contributions, and extra payments mean those items are excluded until you enter them. Replace these assumptions with your own transaction amounts.

Set aside ownership costs first

The budget field is for the loan payment alone. Decide separately what you can spend on insurance, fuel, maintenance, repairs, registration, and other expenses. CFPB lists those ownership costs when discussing loan comparisons. Do not put your full transportation budget into the loan field unless you have already allowed for the expenses outside the loan. The tool supplies no income percentage or recommended spending threshold.

Separate borrowing capacity from price

The affordable financed amount is the principal whose modeled payment matches your monthly loan budget. Down payment and trade-in equity can then raise the purchase price supported by that principal. Fees and an unpaid trade-in balance can reduce it. This is why the displayed car-price ceiling can be different from the loan amount. The result is a mathematical payment limit, not a prediction of how much a lender will approve.

Use the tax assumption carefully

This tool calculates purchase tax as car price multiplied by the rate you enter. It does not subtract a trade-in tax credit or apply state exemptions, caps, or separate rules for taxable fees. If your quote uses another taxable base, use the homepage calculator to check a specific proposed purchase with that treatment. Enter only fees that will be financed in the fee field. Cash-paid fees belong in your separate cash budget.

Check a shortfall before shopping

The maximum price is limited to zero when fees and trade-in payoff use more money than the loan capacity and your contributions can cover. In that case, the tool reports the additional cash shortfall. Increasing the down payment or reducing the balance to carry forward changes that result. A zero-price ceiling is a signal that the entered purchase components cannot fit within the entered payment budget under this model.

Test your ceiling in the loan calculator

Take the displayed price and enter it into the homepage tool with the same inputs. The modeled monthly payment should return to your budget when the assumptions match. Change the term or APR to see how sensitive the ceiling is to the offer. A longer term can support more principal at the same payment but can also increase the total interest paid. Use the term comparison table to review that tradeoff. Keep written quotes so you can check the actual amount financed and contract payment before committing.

Worked example

Official CFPB worked example: a $20,000 loan at 4.75% interest. The published figures are rounded to whole dollars. See the original example. The calculator uses unrounded values internally and displays cents.

How it works

B is your monthly loan budget. The principal formula is the fixed-payment amortization formula solved for P. The price formula solves the purchase-cost equation using tax on the full price. A negative price becomes zero, with the uncovered amount shown as a cash shortfall.

P is the financed principal, r is the monthly rate, n is the number of monthly payments, and M is the regular payment. Each month, interest equals the previous balance multiplied by r. Principal repaid equals the payment minus that interest. The remaining balance falls by the principal repaid. These steps generate the schedule shown by the tool.

This is the standard fixed-payment amortization model described by CFPB auto loan amortization guidance. We use the entered APR as the annual rate for this estimate. APR can include fees; a contract payment based on a separate note interest rate can differ. Use the contract interest rate in the rate field for a closer payment match when it differs from APR. There are no balloon payments, late fees, missed payments, or daily interest adjustments in this model.