Car loan calculator
When shopping for a new car, the sticker price is just the start. Use Ratehub.ca’s car loan calculator to help you figure out the ideal down payment, interest rate, and total cost of financing your vehicle purchase.

Natasha Macmillan, Business Unit Director - Everyday Banking
Car loan calculator explained
Our car loan calculator helps you anticipate your monthly car (or other vehicle) payments based on the price of the vehicle, loan term, and car loan interest rate.
- Price of vehicle: The full price of the vehicle including provincial taxes.
- Loan term: How long you’ll take to repay the loan, typically expressed in months (e.g., 12, 24, 36, 48 months).
- Interest: The annual interest rate (APR) for the loan.
- Down payment: The amount of cash you’ll pay upfront as a down payment.
You can also fill out the optional fields for a more precise estimate of your car loan payments:
- Trade value: The value of a trade-in vehicle, if applicable (can be left blank if no trade-in).
- Rebates & incentives: Any rebates or incentives from the dealership or manufacturer that reduce the loan amount.
- Loan origination fee: The fee charged by the lender for processing the loan application.
- Additional costs: Other costs that may be included in the loan, such as registration fees, insurance, or other applicable fees.
Once you’re done, you can then view your car loan payments based on a monthly, bi-weekly, or weekly payment schedule. You’ll also see the amount financed, which is the actual amount that you’re borrowing with your car loan. All of this will help you assess how much car you can afford.
How car loans work
After a home, buying a car is probably the biggest purchase you’ll make. Unless you have plenty of cash on hand, you’ll typically need to get a loan to pay for a car. This is also known as financing a car.
To be clear, financing a car purchase with a car loan means you’ll own the car once the loan is paid off. This is different from leasing a car, which is essentially a long-term rental where you have to return the car at the end of your lease.
What to consider when applying for a car loan
Your budget
While our car loan calculator will tell you your monthly financing costs for a vehicle, remember to factor in other costs of car ownership: fuel, maintenance, parking, taxes and fees, and car insurance.
Your loan eligibility
When reviewing your car loan application, lenders will check your income and credit rating to ensure you’re capable of repaying the loan. To get the lowest auto loan rates possible, you’ll want to increase your income and show that you haven’t already borrowed too much.
The type of car you’re getting (and where)
The auto loans available to you also vary depending on what car you’re getting, and where you’re getting it. New car loan rates tend to be lower than that for used cars, and preferred vehicle makes and models also tend to get lower interest rates.
Fixed vs. variable rate loan
While car loans usually have fixed interest rates, variable rate auto loans are also available. Fixed-rate car loans tend to start off with higher interest rates, but they keep your monthly payments predictable. Variable-rate car loans have interest rates that will fluctuate with the market, making budgeting challenging — but they start off with lower interest rates, so you may pay less interest overall.
Can you use a personal loan for a car loan?
You can use a personal loan to buy a car, but you’ll need to do some math to compare the total cost compared to a car loan. Interest rates tend to be lower for car loans: one reason for this is that auto loans are secured by using the purchased vehicle as collateral. On the other hand, car loans often have longer terms — meaning you’ll pay more in interest — and may include several fees.
There are a few scenarios where you may prefer to use a personal loan rather than a car loan. These include:
- Buying a car from a private seller. A private seller may offer the best deal on a vehicle you’ve been eyeing, but this means you won’t be able to get an auto loan through a dealer. If you don’t have enough cash on hand to pay full price, a personal loan is a viable option. Not sure which way to go? Check out our blog on the differences between purchasing a car from a private seller vs a dealer.
- Avoiding hefty fees. Car loans often come with more fees than personal loans, especially if you’re getting your car loan through a dealer which has a special arrangement with the lender — the dealership may add their own fees on top of any standard loan fees.
- You qualify for a competitive personal loan rate. If you have excellent credit, you may be able to obtain a low interest personal loan. This is If you want to pay more in cash and less in financing, a personal loan may make more financial sense.
What credit score do I need for a car loan?
The credit score needed for a car loan varies by lender, but it’s best if you have a credit score of 650 and above. As with a credit card or mortgage, a higher credit score will increase your chances of getting approved for a car loan with more favourable interest rates.
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FAQ
Should I choose monthly, bi-weekly, or weekly car loan payments?
Your ideal car loan payment frequency depends on how you budget your money. Generally, a more frequent loan payment schedule lets you pay off your loan faster. For instance, over the course of a year, you’ll pay more towards your car loan if you make weekly payments, but you’ll also save money on interest.
On the flip side, monthly payments will mean you’re paying off your loan more slowly, but this makes each payment more affordable and manageable. Choose your payment schedule based on your priorities and overall financial situation, such as any other debt or investments you may have.
What loan term should I choose?
The longer your car loan term, the more time you have to pay off your loan. The tradeoff for this, however, is that you end up paying more in interest. You also run the risk of being “upside down” on your car loan, where you owe more than your vehicle is worth.
When choosing a car loan term, consider factors such as the depreciation rate and vehicle warranty. For instance, a new car loses much of its value in the first year, while certain makes and models depreciate more slowly than others. As your car ages, it’ll also cost more in repairs — if the vehicle warranty ends before your loan does, you might end up paying for a car you can no longer use.
Do I need a down payment for car loans?
Car loans in Canada don’t always require a down payment: while lenders typically look for a 10%-20% down payment, zero down payment car loans are available if you’re short on cash. However, zero down payment loans often have a higher interest rate and require a solid credit history to show that you’ll reliably repay the loan.
Should I get a car loan from a bank or the dealership?
It really depends on the rate being offered as well as the conditions. Bank loans may come at a higher interest rate than those offered directly by the dealership, but they offer more lending options. Dealers usually have better rates and more flexible financing terms, but often require sizeable down payments. This guide will help you decide.