Car Loan Interest Calculator
From the loan amount, annual rate and term, compute the equal-monthly-instalment payment and total interest.
Input Data
Results
At a glance:Car Loan Interest focuses on the loan: loan amount, annual rate, term → monthly payment and total interest by the equal-instalment (reducing-balance) annuity formula. r = rate/12, n = term x 12; payment = P x r(1+r)^n/((1+r)^n - 1); total interest = payment x n - P. Example: HK$240,000 at 5% for 5y → ~HK$4,529/month, ~HK$31,746 interest. WARNING: HK car loans are often quoted as 'flat rate'; the same number can cost near double the APR — always compare on APR. This tool uses reducing-balance (APR).
Formula
Monthly payment = P × r × (1+r)^n ÷ ((1+r)^n - 1), r = rate/12, n = term × 12.
Total interest = monthly payment × n - P.
Total repayment = P + total interest.
$$r = \\dfrac{\\text{Annual rate}\\%}{12},\\quad n = \\text{Term (years)} \\times 12$$$$\\text{Monthly payment} = P \\times \\dfrac{r(1+r)^n}{(1+r)^n - 1}$$$$\\text{Total interest} = \\text{Monthly payment} \\times n - P$$How to Use
- Enter the car-loan principal.
- Enter the annual rate and term.
- View the monthly payment, total interest and total repayment.
FAQ
Why is the payment fixed but interest falls each month?
Under equal-instalment repayment, the monthly payment is fixed but interest is charged on the remaining balance. As the balance falls, the interest portion drops and the principal portion rises, so you repay more principal later.
How much does the rate affect total interest?
Higher rate and longer term raise total interest sharply. For the same loan, 4% vs 8% can more than double the interest. Seek a lower rate or shorter term to save substantially.
Does early repayment save interest?
Yes. Interest is on the remaining balance, so repaying principal early cuts future interest. But check the contract for early-repayment penalties or fees.
What are typical Hong Kong car-loan rates, and flat rate vs APR?
HK car-loan APR varies by credit, vehicle (new/used) and lender, commonly from a few per cent to over 10%. The key trap is the quote basis: dealers/finance firms often quote a 'flat rate' (flat rate) — interest is charged on the ORIGINAL full principal for the whole term even as you repay. This tool uses reducing-balance (APR), where interest falls with the balance. The same headline number (e.g. 'flat 6%') can be roughly 'APR 11-12%' — nearly double. Always ask whether a quote is flat or APR, and compare on APR.
What to watch on early settlement of a HK car loan?
Under reducing-balance, early principal repayment theoretically saves interest; the earlier the better. But check (1) early-repayment penalty/fee (some charge a % of remaining interest or a fixed fee), (2) flat-rate loans may not refund interest proportionally, and (3) opportunity cost if your cash earns more elsewhere. Confirm the rate basis and penalty before settling early.
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References
Content review: Calculatorism Finance Team. Results are for reference only; please refer to the relevant authorities for the official figures.