Car Loan Calculator
Calculate your car loan repayments, total interest and compare different loan terms. Includes balloon payment option.
Disclaimer
This calculator provides estimates for general information purposes only. Results should not be relied upon as professional financial, tax, or legal advice. Tax rates and thresholds are based on publicly available ATO data and may change. Always consult a qualified tax agent or financial adviser for advice specific to your circumstances.
Frequently Asked Questions
What is a balloon payment on a car loan?
What interest rate should I expect for a car loan?
What is Car Loan?
A car loan calculator estimates your monthly repayments for a vehicle purchase based on the loan amount, interest rate, loan term, and optional balloon payment.
How this calculator works
Enter the vehicle price, your deposit (which reduces the loan amount), the interest rate, and the loan term. The calculator uses the standard amortisation formula to compute monthly repayments. The optional balloon payment field lets you model a large final payment — common in car finance at 20-30% of the vehicle price. A balloon reduces monthly repayments but means you owe a lump sum at the end. The pie chart shows the split between principal and total interest, revealing the true cost of financing. For the best rate, get pre-approval from a bank before visiting the dealership.
Typical Car Loan Rates 2025-26
Secured car loans (most common): 6.5-10% pa for new cars from major banks, 8-12% for used cars under 5 yrs old, 12-18% for older vehicles. Unsecured personal loans: 9-15% pa. Dealer finance: often 0-3% advertised but tied to higher car price (manufacturer subsidy in lieu of discount) — check the comparison rate AND negotiate cash price separately.
Loan Term Trade-offs
Standard 3-7 years. Shorter = higher monthly payment but less total interest. 7-year loan on a 5-year-old car risks being 'underwater' (owe more than car's worth) by year 3-4. Recommended: match loan term to expected ownership AND keep loan term shorter than vehicle's useful life remaining.
Balloon Payments — Tool or Trap?
Balloon = large final payment (typically 20-30% of car price). Reduces monthly payments significantly but creates a 'cliff' at end of loan. Options at end: (1) pay it out from savings, (2) refinance the residual into new loan, (3) trade-in. Used wisely: matches loan to depreciation curve. Used poorly: leaves you owing $15-25k on a 7-year-old car.
Buy New vs Used vs Novated Lease
NEW: warranty, latest safety, easy financing. Depreciates 30-50% in first 3 years. USED 2-4 yr old: best value sweet spot. NOVATED LEASE (if PAYG employee): saves 25-35% on EVs under LCT threshold ($91,387). CASH purchase: cheapest total cost of ownership when affordable.
Common Hidden Costs
Loan establishment fee: $200-$500. Monthly account fee: $5-$15. PPSR registration: $7. Early repayment fees on fixed-rate loans (some lenders). GAP insurance bundled at dealer: $800-$2,000, optional. Extended warranty: usually overpriced — assess third-party policies separately if needed.
Tax Treatment for Work Use
If you use the car for work/business: claim interest portion of loan as deduction (proportional to work-use %). Combined with logbook depreciation, deductions can be significant. For sole traders/contractors using cents-per-km method: this method already includes all costs including financing — can't separately claim interest. Pick whichever method gives bigger total deduction.
Official Sources
All calculations are performed in your browser — your data never leaves your device. Results are for general guidance only and should not be considered professional financial advice.
Built and maintained by Konstantin Iakovlev. Data sourced from the ATO and official Australian government sources.