Car Loan Calculator - Calculate Your Car Loan Repayments

Calculators can be helpful tools when comparing loans. RateCity provides users with two different car loan calculators to assist in narrowing down their search: a repayment calculator and a borrowing power calculator.

What can a car loan repayment calculator tell me?

A repayment calculator may be able to provide you with an estimate of your potential car loan repayments, based on your ideal loan amount, loan term, and interest rate. Using the information you provide, the car loan calculator estimates your potential weekly, fortnightly, or monthly repayments, as well as the interest payable over the life of the loan. 

Once you've calculated the total expenses associated with a prospective car loan and have an estimate of your repayment obligations, you'll be well-equipped with the essential information and research materials to make an informed decision. 

Faced with a choice of multiple car loans, you can input various interest rates and loan durations to assess how your repayments may fluctuate in each scenario. This approach may assist you in identifying a car loan that aligns more closely with your financial constraints and objectives.

While our comparison tables enable you to compare the interest rates, fees, and the various terms and conditions attached to car loans, a calculator can take your research one step further by helping you evaluate the overall cost of borrowing for different scenarios. This could help ensure that not only are your monthly repayments manageable, but you're also making a financially prudent decision over the life of the loan. 

What can a car loan borrowing power calculator tell me?

A borrowing power calculator assesses your personal financial information to offer a general idea of how much you may be able to borrow.

If you’re searching for a car loan, it’s essential to know that lenders won’t necessarily approve any loan amount you seek. The amount of money you can borrow largely depends on your financial situation, including your income, expenses and credit history.

By examining your credit score and potential interest rate, as well as how much you can afford to repay and at what frequency, the calculator provides an estimate of your “borrowing power”: how much you can borrow and service affordably.

This calculation may come in handy when narrowing down your shortlist of vehicle options, whether online or at a car dealership, as you’ll have a better understanding of the various options you may be able to afford.

Utilising calculators won’t affect your credit score, so use them as many times as you like to compare different loans.

The Repayment Calculator can help you determine your estimated repayments and the total interest payable on a car loan.

1. Enter how much you’d like to borrow: You may have a rough figure in mind based on the car you want to buy, but you might like to consider entering different loan amounts to compare repayment estimates.
2. Enter your preferred interest rate: If you’ve made a short list of options from our comparison tables, now is the time to enter their details. A lower interest rate could mean lower repayments but be sure to also consider the comparison rate and any other fees that may be involved.
3. Select a loan term: A longer loan term (4-7 years) could mean more affordable repayments, but you could end up paying more interest over the life of the loan when compared to a shorter term (1-3 years).
4. Enter your credit score: While not necessary for the calculation, by entering your credit score you can view a range of car loan options under the results page that may suit your financial situation.
5. View results: To the right of the page, you will see your estimated repayments. You can also choose to make your repayments monthly, fortnightly, or weekly. This may help make it easier to see how the repayments could fit into your budget and pay cycle.

The Borrowing Power Calculator provides an estimate of how much you may be able to borrow for a car loan based on affordable repayments.

The results shown are for a loan term of five years and assume that the interest rate remains the same throughout that time. To get a more complete picture, you should check out the Calculator Assumptions and Disclaimers for details.

Here's how to use the car loan Borrowing Power Calculator:

1. Determine your affordable repayment amount: Begin by evaluating your budget, taking into account both your income and expenses. Then, input the amount you feel comfortable repaying with your car loan.
2. Specify your desired interest rate: Once you've narrowed down your choices from our comparison tables, enter the interest rate you're aiming to secure.
3. Select a repayment schedule that suits your needs: Opt for a repayment frequency that aligns with your lifestyle - whether it's weekly, fortnightly, or monthly. For instance, if you receive your paycheck each month, monthly repayments might be the most suitable choice.
4. Provide your credit score (optional): While not mandatory, entering your credit score can assist in identifying car loan options that match your financial situation.
5. Review the results: On the right side of the page, you'll find an estimate of how much you can borrow based on the information you've supplied, considering a loan term of five years. Additionally, you can view an estimate of the total interest you'd pay over this loan term.

You can check your credit score online from time to time to keep a tab on your financial health. If you have a good credit score, you may confidently apply for car loans with competitive rates and additional benefits.

However, if you find your score to be low, you might not qualify for the lowest rates offered by lenders. Depending on the urgency of your requirement, you may need to adjust your budget accordingly. Alternatively, you could wait for some time to apply for a car loan and work on improving your credit score in the meanwhile.

What’s my credit rating? 

Your credit rating, also known as a credit score, is a numerical representation of your creditworthiness. Lenders typically use it to evaluate the risk of lending money to you. A higher credit rating indicates a lower credit risk, making it more likely for lenders to offer you better interest rates. On the other hand, a lower credit rating may result in higher interest rates. 

Besides the interest rate on your loan, your credit rating can have an impact on your likelihood of getting approved for a car loan. Before you apply for any financial product, such as credit cards or home loans, it's a good idea to find out your credit rating. This is because having a poor credit history and a low credit score can increase the chances of loan rejection. Since being denied credit can further harm your credit score, it's important to try and avoid this situation. 

If you're interested in obtaining your credit scores for free from major credit bureaus in Australia, like Equifax and Experian, you can visit RateCity's credit score hub. A "soft" credit check will be performed on your credit history, but this will not affect your credit score. 

Before you dive into the car loan application process, it can help to familiarise yourself with the key elements that define a car loan. To help you make informed decisions, here are some common terms and concepts you should grasp before you begin your car loan journey.

Interest rates

Car loan interest rates play a pivotal role in determining the cost of your ongoing repayments and the total amount you'll pay over the life of the loan. These rates are applied on top of the principal amount you borrow. 

When comparing loan options, it's not just about the advertised interest rate; you should also consider the comparison rate. This figure typically encompasses the interest rate plus any additional fees and charges, providing a more accurate representation of the cost of a hypothetical car loan.

Fees

Car loans may come with various fees that can impact your overall expenses. These fees include establishment fees or application fees, ongoing charges like account-keeping fees, early repayment fees, and redraw fees. Being aware of these fees can help you budget effectively and choose a loan that aligns with your financial goals.

Repayments

Paying off your car loan involves making regular, consistent payments. These payments can occur on a weekly, fortnightly, or monthly basis. The specific amount you'll pay is influenced by factors such as your interest rate, whether the rate is fixed or variable, any associated fees, the loan's duration, and whether you've opted for a balloon payment at the end of the loan term. Understanding how repayments work is crucial for managing your financial obligations effectively.

Lending criteria

Different car loans come with distinct eligibility requirements. It's wise to assess whether you meet the criteria for the loan you’re after before proceeding with the application. Typically, meeting these criteria involves being an Australian citizen or permanent resident, having a minimum income that meets the lender's threshold, and maintaining a good to excellent credit score. This preliminary assessment can save you time and effort, ensuring you're pursuing a loan that you're more likely to qualify for.

To find the car loan that best suits your financial situation, it might be worthwhile considering the following:

What additional costs should you consider when comparing car finance options?

As well as calculating how much you can comfortably afford to borrow, it might also be worth factoring in any extra costs that can come with car ownership. This may better prepare you to budget for ongoing costs that are additional to your loan repayment.

Some common, extra costs car owners might incur include:

• Stamp duty: When purchasing a car, you may be required to pay a one-time stamp duty fee. This fee may vary based on the value of the vehicle and the state you reside in.
• Luxury car tax: When you purchase a luxury car, you may be subject to Luxury Car Tax (LCT). This tax is applicable when you buy a car whose GST-inclusive value exceeds the current LCT threshold set by the ATO. The LCT is imposed at a rate of 33% on the amount that exceeds this threshold. If LCT applies to your car purchase, it’s likely to be included in your purchase price. However, remember to confirm this with your dealer to avoid any additional charges further down the road.
• Registration: Every car must be registered with the appropriate authorities. Registration fees vary depending on your location and the type of vehicle you own. These fees are typically renewed annually or biennially.
• Car insurance: Acquiring car insurance is crucial to protect yourself and your vehicle in case of accidents, theft, or damage. Insurance premiums vary depending on factors such as your age, driving record, location, and the type of coverage you choose.
• Petrol costs: Fuel expenses constitute a significant portion of car ownership. The cost of petrol varies based on the fuel efficiency of your vehicle, the distance you drive, and the prevailing fuel prices in your area.
• Regular services, maintenance, and repairs: Cars require regular servicing to maintain optimal performance and ensure longevity. Routine maintenance tasks such as oil changes, tire rotations, and brake inspections incur costs. Additionally, unexpected repairs due to wear and tear or accidents may arise.
• Tolls: Your experience may vary based on your location, but you might come across toll roads or bridges that demand payment for access. These charges can accumulate significantly, especially if you're a frequent traveller on toll routes.

By accounting for these various expenses, you can obtain a more comprehensive understanding of the financial commitments involved in leasing a car. This knowledge will assist you in determining a suitable borrowing amount that aligns with your budget and allows for the smooth operation and maintenance of your vehicle.

A car loan calculator and a personal loan calculator are very similar, although they differ in one key aspect: the default interest rate. This is because the average interest rate for both car loans and personal loans is different.

A car loan is typically secured against the vehicle purchased and secured loans generally attract lower interest rates. Comparatively, the average personal loan rate may be much higher as it’s lifted by the number of unsecured personal loan rates in the RateCity database. Therefore, the average car loan interest rate may be lower than that of a personal loan. 

So, when using the car loan calculator and personal loan calculator, you may find the default interest rate is different, and that if you don’t set an interest rate the estimated repayments may be higher for personal loans.