Are you thinking about purchasing a new (used) car? Or do you have car already and want to refinance it for whatever reason – be it a lower Interest Rate, lower Repayments or a better Finance Deal?
In this case we have a perfect Calculator in Excel just for what you need!
To download a sample click here: get sample
Note: The sample version is limited to just 30 payments.
If you need more than 30 repayment then you can purchase the full version of this calculator.
To do so click here: buy full version
We have also prepared a tutorial for you describing step-by-step how the process of refinancing usually works and how to use our Calculator.
Step #1: Negotiate Discount off Your Car’s Retail Price
The purpose of the first 3 steps is to determine your Opening Loan Amount which will be then used as an entry value in the Excel calculator.
If it’s the first Financing Loan for your new (or used) car then you start with Retail Ticket Price.
Usually you can negotiate some discount, so take that discount off the retail price.
Step #2: Find Out What Deposit You Need To Pay
Most car finance deals require you to pay a deposit. This usually sits at about 20% but it can be as low as 0% to 10%. It all depends on your Finance company and the car you are buying.
New cars have higher deposits as compared to used cars. These come with lower and sometimes even with a zero deposit.
Find out how much deposit you will have to pay and take that deposit off the retail price.
Step #3: Find Out If Loan Comes With Administration Fees
Taking a new Loan usually involves paying some administration fees charged by your Loan provider. In case of refinancing some fees may be payable to your old Finance company or Bank.
Sometimes you need to pay these fees in advance, but in most cases you can add them to the Loan Balance.
Find out what they are and add all fees to the car’s retail price.
Step #4: Calculating Car Loan Opening Balance
After negotiating discount, figuring out how much deposit you need to pay and what administration fees are associated with your loan.
Now you proceed to calculate the Opening Loan Balance.
Use this Amount and enter into our Excel Calculator. This will be the Opening Amount or Starting Balance of your new loan.
Step #5: Find Out Your APR – Annual Percentage (Interest) Rate
Some financing deals may show monthly or weekly interest rates. Because they look low, they appear more attractive to borrowers.
For the purpose of this Calculator you will need to figure out what is the yearly interest rate.
If you have monthly interest rate then simply multiply it by 12. If you have weekly interest rate then multiply it by 52 to get the APR value.
Use this Annual Percentage Interest Rate with our Car Loan Payoff Calculator.
Step #6: Decide About the Repayment Frequency
Most car loans are paid weekly, fortnightly (bi-weekly) or monthly. Choose a frequency that best suits your individual needs.
Usually people align paying their debts with the frequency of their pay checks. So if you are paid weekly then also pay your Loans weekly, if monthly then pay the loans monthly.
Aligning it with your wages will make things easier – you won’t need to budget so heavily. It will also help you avoid running out of money causing late payments with additional fees or penalties.
There is one more thing to remember – paying your car loan (or any loan in fact) more frequently will save you considerable amount of money on Interest.
The result is that with more frequent payments you either pay less Interest or you manage to payoff the loan earlier.
Step #7: Find Out About the Interest Compounding Frequency
As a rule of thumb, the interest compounding usually equals the repayment frequency. If you pay your Loan weekly then the Interest is also compounded and added to your loan balance weekly, and so on.
This may not be the case at all times. Some banks will push for more frequent compounding. Doing so they are able to charge more on Interest. That’s because in each subsequent period you end up paying Interest on top of Interest.
We recommend you to find out from your Credit provider how they compound the interest and then use that as a parameter in our Excel Calculator.
This calculator is one of the very few calculators on the market that allows you to use variable interest compounding frequencies. It makes it more precise.
Step #8: Determine Your Preferred Payment Amount
Most loan calculators will ask you for the Loan Term – or how long you want be paying off your loan.
Here again, our calculator is different. It will allow you to set your own Payment Amount and then it will calculate how long the loan will last.
Main advantage of this approach is that you can choose amount that you can easily afford. One of the reasons people refinance their cars is their desire to lower the monthly payments.
Your current credit provider may be not willing to adjust the loan parameters; therefore you may decide to change the Credit Company.
In the Calculator’s entry parameters sections simply choose your preferred Payment Amount and the calculator will do the rest.
Step #9: Generate Payment Schedule (Payment Calendar)
Once you have all data needed to produce the Payment Schedule, simply enter all details into our Car Loan Calculator and generate the schedule.
It will give you the dates when your loan payments are due, how much you need to pay and also a breakdown into Interest and Principal Amounts.
In the top-right section you can also see the summary results:
- Total Loan Term (time to repay the car loan in years)
- Total Interest Paid
- Total Principal Paid (should equal the original Loan Amount)
Step #10: Bonus Features – Extra Payments and Change Payment Dates
This Car Loan Financing Calculator includes some additional extra features. It’s nice to have a perfect payment schedule, but the life is seldom perfect.
In case you miss a payment or make some late payments, simply change their Dates. The Calculator will then automatically adjust the schedule so that it is always actual and up to date.
From time to time you may receive some extra money like bonuses from your work.
Wise thing is to put that extra cash against your Loan so it gets paid-off faster. We have therefore designed the calculator with the option to enter any number of extra repayments.
We hope that you will like our Advanced Car Loan Financing APR Calculator in Excel. You can find more detailed User Manual including pictures and showing you exactly how to use it in this article.
If you have any questions or inquiries, please talk to us via our Contact Form (located in the Menu Bar).