Reverse-calculate the real APR on a car loan from a quoted payment, or compute the payment from a known rate.
Loan amount = vehicle price − down payment − trade-in, plus any sales tax rolled into the loan.
Enter the monthly payment the dealer or lender quoted you. We'll reverse-solve for the APR.
A 1% APR reduction on a $30K / 72-month loan saves $1,300+ over the loan. See the top-rated credit-score and auto-finance guides on Amazon.
💰 See top auto-finance books on Amazon →Pick your direction first. REVERSE mode is the most common use case: enter the loan amount, the monthly payment you were quoted, and the term, and the calculator reverse-solves the amortization equation to find the real APR you're being charged. FORWARD mode computes the monthly payment when you already know the APR (or want to estimate using the 2026 average of 7.0%).
Enter the loan amount using the quick-pick chips ($10K to $50K) or type your own. The loan amount is the principal — the vehicle price minus your down payment minus trade-in, plus any sales tax that gets rolled into the loan. If you put $0 down on a $30K car and your state charges 7% sales tax, your loan amount is $32,100 ($30K + $2,100 tax).
Choose the loan term. The default 72 months matches the 2026 US average for new-car loans, but you can pick 36, 48, 60, or 84 months. Match the term to the dealer's quote — entering 60 months when the dealer quoted 72 will give a wrong APR.
The result shows the APR (REVERSE) or the monthly payment (FORWARD) at the top, plus the total interest, total paid, and what the payment would be at 60 or 84 months for the same APR. The rate-tier card labels the APR Excellent / Good / Fair / Poor against 2026 industry averages so you can immediately see if the dealer's quote is competitive.
Real APR (REVERSE mode): The annual percentage rate implied by the loan amount, monthly payment, and term. Solved by bisecting the standard amortization formula: P × (r(1+r)^n) / ((1+r)^n − 1) = payment. Bisection finds the r that makes both sides equal, then multiplies by 12 and 100 to express as APR.
Monthly payment (FORWARD mode): The dollar amount you'll pay each month. Uses the same amortization formula solved for payment given a known APR.
Total interest: How much extra you pay in interest over the loan's life. The difference between total paid and the amount financed.
Rate tier verdict: 2026 industry thresholds — Excellent below 6.0% (manufacturer incentives, top-tier credit), Good 6.0-7.5% (prime borrower market average), Fair 7.5-10% (subprime or used-car), Poor above 10% (deep subprime or rate markup). The verdict is the single most useful signal for whether a dealer quote is in line with the market.
60 vs 84 month comparison: The same loan amount and APR at 12 months shorter and 12 months longer. Useful for negotiating the term — showing the dealer that a 60-month term saves $2,000+ in interest often gets them to lower the rate too.
Enter the loan amount, the monthly payment you were quoted, and the term. The calculator reverse-solves the amortization equation to find the APR you're actually being charged. The 2026 US average is 7.0% for prime borrowers — anything above 9-10% for a new car usually means the deal isn't competitive, and dealer markups (called "rate buydowns" or "yield spread premiums") can add 2-3% on top of the lender's offered rate.
For a new car in 2026, an excellent APR is below 6.0% (top-tier credit, manufacturer incentive rate), good is 6.0-7.5% (prime borrower, average market), fair is 7.5-10.0% (subprime, dealer financing, or used car), and poor is above 10% (deep subprime, buy-here-pay-here, or rate markup). For used cars, add 1-2% to each tier. The 2026 average new-car APR is 7.0% for borrowers with 720+ FICO.
The interest rate is the cost of borrowing the principal. The APR (Annual Percentage Rate) includes the interest rate plus most lender fees, expressed as a yearly rate. For a car loan, APR is usually 0.1-0.5% higher than the interest rate because of origination fees. Lenders are required to disclose APR under the Truth in Lending Act, so when you compare dealer quotes, use APR — not the interest rate.
The formula is: Payment = P × (r × (1+r)^n) / ((1+r)^n − 1) where P is the principal financed, r is the monthly interest rate (APR ÷ 12), and n is the number of months. For a $30,000 loan at 7.0% APR for 72 months: r = 0.00583, (1+r)^72 ≈ 1.522, so the payment = $30,000 × (0.00583 × 1.522) / 0.522 = $279.86 / 0.522 = $511.18/month. The calculator does this math for you in FORWARD mode.
Yes. Dealers can add a "rate markup" or "yield spread premium" of 1-3% on top of the rate the lender actually approved you for. The dealer keeps the difference as compensation. This is legal in most US states (Massachusetts and a few others restrict it). To avoid markups: get pre-approved by a credit union or bank before visiting the dealer, and ask to see the lender's buy rate. Federal Credit Union average rates are typically 1-2% lower than dealer financing.
In 2026: 780+ FICO gets the best rates (often below 6% for new cars, with manufacturer incentives dipping to 0-2% for tier-1 buyers). 720-779 gets prime rates (6-7.5%). 660-719 gets near-prime (7.5-9.5%). 600-659 gets subprime (9.5-13%). Below 600 gets deep subprime (13-21%). A 100-point FICO improvement can save $2,000+ over a 5-year loan. Check your credit score free via Credit Karma, Discover, or your bank before applying.
Top-rated credit-score and auto-finance books on Amazon — the most popular titles buyers use to negotiate better loan terms: