Car Loan Calculator

Enter the car price and your deposit (or trade-in). The calculator borrows the difference. Add the interest rate, the loan term in years, and a balloon if you want one. Leave the balloon at $0 for a standard loan that is fully paid off by the end.

The balloon is entered as a dollar amount. Lenders usually quote it as a percentage of the car's price, so convert it first: a 30% balloon on a $45,000 car is $13,500.

You get the monthly repayment, a fortnightly figure (the monthly amount × 12 ÷ 26), total interest and the total you will repay, including the balloon.

• The rate is assumed to be fixed for the whole term, which is normal for car loans.
• Establishment fees, monthly account fees, broker or dealer fees and add-ons such as insurance or extended warranties are not included.
• Results are estimates. Your lender's contract and repayment schedule are what count.

A balloon payment, also called a residual, is a lump sum you agree to pay at the end of the loan. Your regular repayments only pay down part of the loan, and the rest is left until the final day.

Balloons are usually set at around 20% to 40% of the car's price. Some lenders allow up to 50%, but often only on shorter terms or newer cars. The longer the term, the lower the maximum balloon tends to be.

The catch is that the balloon amount is never paid down during the loan, so you pay interest on it the whole time. That is why a balloon always costs more in total, even though each repayment is smaller.

Take a $45,000 car with a $5,000 deposit, so you borrow $40,000 at 7.5% over 5 years:

• No balloon: $802 a month ($370 a fortnight). Total interest $8,091. Nothing left owing at the end.
• 30% balloon ($13,500): $615 a month ($284 a fortnight). Total interest $10,423. You still owe $13,500 at the end of year 5.

In the balloon example, repayments are about $186 a month lower, but you pay $2,332 more interest and must find $13,500 at the end. Whether that trade is worth it depends on what you plan to do when the balloon falls due. Most people do one of three things:

• Pay it in cash from savings, a bonus or other money you have set aside.
• Refinance it into a new loan. This means more interest, and approval is not guaranteed. It depends on your income, credit history and the car's value at the time.
• Sell or trade in the car and use the proceeds to clear the balloon. If the car is worth less than the balloon, you have to cover the gap yourself.

This calculator uses the interest rate only. Lenders must also show a comparison rate, which rolls the interest rate and most fees into one figure. It is a better guide to the true cost, but it is worked out on a standard example loan, so compare loans with the same amount and term.

Watch for establishment fees, broker fees, dealer or introducer fees, monthly account fees, and early payout or break fees on fixed-rate loans. A secured car loan, where the car is security, usually has a lower rate than an unsecured personal loan, but the lender can repossess the car if you stop paying. Compare dealer finance with a few other lenders before you sign.

If a balloon is the only way the repayments fit your budget, it may be worth looking at a cheaper car. A balloon lowers the monthly cost; it does not make the car cheaper.

This is a car loan calculator, not a lease calculator. With a novated lease, your employer pays the lease and running costs from your salary, partly before tax. A novated lease also ends with a residual, which must be at least the ATO minimum for the term (28.13% of the car's cost for a 5-year lease). To estimate the tax side, use the novated lease calculator.

If the car is mainly for business, a chattel mortgage or lease may have different tax treatment. Talk to your accountant about what you can claim.