Please note these calculations do not include loan establishment fees, which are a one-off payment usually between $100-$450. When signing for vehicle finance a lender may also have monthly account maintenance fees you need to take into consideration. Make sure you view the loan disclosure statement before signing, so you know all terms, fees and charges related to your finance agreement.
The following are all based on a $20,000 car loan.
Car Finance at 6.25% interest with a loan term of 36 months
- Total Repayment: $21, 985
- Total Interest: $1, 985
- Monthly repayments: $610.70
- Weekly repayments: $140.93
Car Finance at 6.25% interest with a loan term of 24 months
- Total Repayment: $21, 328
- Total Interest: $1, 328
- Monthly repayments: $888.67
- Weekly repayments: $205
Car Finance at 9.95% interest with a loan term of 36 months
- Total Repayment: $23, 215
- Total Interest: $3, 215
- Monthly repayments: $644.87
- Weekly repayments: $148.82
Car Finance at 9.95% interest with a loan term of 24 months
- Total Repayment: $22, 138
- Total Interest: $2, 138
- Monthly repayments: $922.44
- Weekly repayments: $212.87
Car Finance at 14.95% interest with a loan term of 36 months
- Total Repayment: $24, 941
- Total Interest: $4, 941
- Monthly repayments: $692.82
- Weekly repayments: $159.88
Car Finance at 14.95% interest with a loan term of 24 months
- Total Repayment: $23, 262
- Total Interest: $3, 262
- Monthly repayments: $969.26
- Weekly repayments: $223.68
Looking at the above rates you can see that both the interest rate and the length of the loan affects your repayment amounts. A shorter loan term can bring your total repayments down so you are paying less interest however this means your weekly/monthly repayments are higher and could be unaffordable.
When choosing the loan term you need to be realistic and know what you can afford to pay per month and still have money left over for any unexpected bills that arise. Once you know the interest rate a lender will give you, calculate a loan term that suits your personal financial situation. If you want to calculate other interest rates and loan terms, use our free car loan calculator here. You can also include dealer establishment fees and a deposit to help calculate more realistic payments.
