Are Car Loan Calculators Accurate?

Date Posted: May 20, 2020

Darts stuck on dartboard

If you’ve searched online for a loan, you’ve probably seen these versatile tools advertised. You may have even used one. But what goes on behind the scenes? And are car loan calculators accurate?

Firstly, what are car loan calculators?

In a nutshell, car loan calculators are online tools which calculate your periodic repayments and can often compare a few different lenders. You’ll need to enter some basic information; total amount being borrowed and length of loan term (years), and you’ll also need to know the proposed interest rate. The car loan calculator then takes this information and processes it to give you an estimated repayment amount.

Loan calculators are great because they can show your possible monthly, fortnightly and weekly repayments, allowing you to budget properly.

Here’s an easy loan calculator to have a look for yourself.


Loan calculators give you an estimate only. Lenders take a lot of details into consideration such as your borrower profile which includes your credit score and the type of vehicle you’re planning to buy, for example. All loan calculators can struggle taking all of this information on board.

However, accuracy can be greatly improved as you enter additional information into the calculator. Here are some of the basics that most car loan calculators request:

Loan amount: this is the total amount of money you plan to borrow. If you’re buying a car for example, often the price isn’t $20,000, it’s more likely to be $19,800 or whatever you can argue the seller down to. Putting in a flat $20,000 may not provide accurate calculations.

Loan term: this is the length of the loan, likely in years. Your repayments will change depending on the term / length of the loan.

Interest rate: you’ll need to know the all-important interest rate. You may have seen rates advertised online and can put those into a calculator but are they the actual rates you’ll get? Lenders take many things into consideration – age of vehicle and borrower profile for example so rates can vary significantly.

Besides these, most car loan calculators can struggle with other parts of a loan such as:

Deposits and trade-ins: dealers may ask you to pay a certain percentage of the car or asset you’re buying as a deposit. Without knowing the exact amount, you won’t be able to give the car loan calculator the correct information. Trade-ins are also an issue as the value of the car you trade can change – you’ll need to discuss this with the dealership.

All in all, it’s pretty fun to use an online car loan calculator. You’ll be able to play around with numbers all from the comfort of your home. Have a think about your budget and the ‘what ifs’ involved in loans. Consider the ‘hypotheticals‘. Would you be able to make bigger repayments if you cut out fun stuff or only ate out once a month? Or what if your income suddenly doubled? Car loan calculators can give you the answer.

Loan calculators are perfect at what they’re designed for – a good estimate based on your input

Try our online loan calculator now to have a play around and see what might work for you.

calculate repayments

Calculate Repayments

With a loan calculator you can work out what your repayments may be, how they can change with interest rates and how much you can borrow based on a weekly, monthly payment. Be armed for when you speak to your lender!

compare loans

Compare Loans

When ready, you will be able to compare loans to help you decide which is better suited to your needs! Assess what terms and figures will better help your situation and be fully prepared when you speak to your broker.