How the Loan & Auto Calculator works

The formula

Step by step

1. Personal-loan mode amortizes your loan amount directly at the monthly rate (APR ÷ 12) over the term in months.
2. Auto mode computes the amount financed = vehicle price + sales tax + fees − down payment − trade-in.
3. Sales tax is applied to the price after subtracting the trade-in credit, as most U.S. states do.
4. Total interest = total of all payments − amount financed.
5. A worked example in auto mode using the calculator's own defaults: a $35,000 vehicle, $5,000 down, no trade-in, 7% sales tax, $500 in fees, 7.5% APR over 60 months. Sales tax is $2,450, the amount financed is $32,950, the payment is $660.25 and total interest is $6,665 — $39,615 in loan payments, and $44,615 out of pocket once the $5,000 down payment is counted.
6. Add an $8,000 trade-in to that same deal and sales tax falls to $1,890, because tax is charged on $27,000 rather than $35,000. The amount financed drops to $24,390 and the payment to $488.73. The trade-in is therefore worth more than its sticker value in most states — it removes both principal and tax.
7. Personal-loan mode skips all of that: $25,000 at 7.5% over 60 months is $500.95 a month and $5,057 of interest. At 0% the engine falls back to principal ÷ months — $416.67 with no interest — rather than dividing by zero.

Assumptions & limitations

• A fixed interest rate and equal monthly payments.
• Sales-tax treatment of trade-ins varies by state; a few states tax the full price.
• Excludes gap insurance, extended warranties, and dealer add-ons unless you include them in fees.
• The trade-in tax credit is not universal. California taxes the full selling price and does not allow the trade-in allowance to be deducted, so the example above would owe $2,450 rather than $1,890. Check your own state's rule before trusting the tax line.
• Negative equity is not modeled. If your trade-in is worth less than the loan still owed on it, dealers commonly roll that shortfall into the new loan; this tool has nowhere to put it, and entering a trade-in larger than the vehicle price clamps both the tax and the amount financed to zero rather than producing a negative loan.
• The amount financed is floored at zero and the term is amortized as whole months. The final payment is trued up so the balance lands exactly on zero — a real lender's last payment will differ by a few cents for the same reason.