SKIP THE TRIP

Maintain Your Peace of Mind With Our 100% Online VIP Sales Experience.

Get Your New Car in 4 Easy Steps:

1. Choose Your Vehicle

2. Select Your Payment Options

3. Value Your Trade

4. Schedule Your Delivery

Buy From Home
Man Using Tablet

How to Calculate the Interest Rate on a Car Loan

When you take out a loan for a new vehicle for your Hannibal, MO commute, you’ll be charged interest over time. It’s important to know how much the interest rates you’re charged impact your monthly payments and the overall amount owed. Luckily, the finance center at Shottenkirk Kia of Quincy can show you how to calculate auto loan interest rates, so you can know what you’ll end up paying. When you take out your next loan, do so with confidence after learning how to figure interest on a car loan with Shottenkirk Kia of Quincy. 

 

 

What Does Interest Rate Mean?

Before we dive into how to calculate interest rates on a car loan, let’s go over what interest rates are. If you buy a new vehicle for your Keokuk, IA drives with credit, then the lender technically owns the vehicle until the credit is paid off. The interest rate you pay on top of the loan payment is essentially a fee for borrowing the money from the lender. 

What determines the interest rate amount? Several factors determine the interest paid on a loan, including: 

  • Principal Amount: This is the amount of money you want to borrow.
  • Loan Term: This is the amount of time you plan to pay off the loan. Longer terms mean lower payments with higher interest, and shorter terms mean higher payments with lower interest. 
  • Repayment Schedule: If you can make payments more than once a month, then you’ll end up having less interest and paying less over time. 
  • Repayment Amount: The amount you pay towards interest and the amount you pay towards your principal amount is what makes up your total monthly payment. 

How to Calculate Auto Loan Interest 

When trying to figure out how to figure interest on a car loan for the first payment, you’ll want to use these steps: 

  1. Divide the interest rate by the number of monthly payments you plan to make for the first year. 
  2. Multiply this number by your loan balance. The loan balance will be the whole principal amount for the first payment.
  3. Multiply it by the balance of your loan, which for the first payment, will be your whole principal amount.

This formula will help you figure out how much interest you’ll pay for the first month. If you want to know how to calculate auto loan interest going forward, then follow these steps: 

  1. Subtract the amount of interest from the first payment. This leaves you with the amount you’ve paid off of the loan principal amount. 
  2. Reduce this amount from your original principal amount to get the new balance of your loan. 

You may not get an exact number every time, but for the most part, that’s how you calculate the interest rate on a car loan. For more finance tips and advice, visit Shottenkirk Kia of Quincy near Pittsfield.

Get the Finance Advice You Need at Shottenkirk Kia of Quincy

Contact us to get all of the financial advice you need, and apply for financing for your next auto loan online at Shottenkirk Kia of Quincy. 

More from Shottenkirk Kia of Quincy

  • 2021 Kia Telluride Interior

    What’s it like inside the Kia Telluride? Before you take an up-close tour of this luxurious SUV at Shottenkirk Kia of Quincy, check out some of the Kia Telluride interior features to see what you can expect and how you can make your drives through Hannibal, MO more comfortable and enjoyable. When you’ve taken a look at some of…

  • 2022 Kia Seltos Price & Trims

    The Kia Seltos cost starts out at $22,490 MSRP for 2022, but the price will vary from trim to trim. Learn about how the price changes for each trim and what you can expect from each of the Kia Seltos configurations with Shottenkirk Kia of Quincy. Then, swing by our dealership to get a closer look at the…

  • 2022 Kia K5 GT-Line

      The Kia K5 is a favored model of the Kia brand by many Hannibal, MO drivers. Of all the available configurations of the K5, the one that truly stands out is the Kia K5 GT-Line. Learn about some of the features and capabilities of the Kia K5 GT-Line with Shottenkirk Kia of Quincy, and visit our dealership to…

Saved Vehicles

SAVED VEHICLES

You don't have any saved vehicles!

Look for this link on your favorites:

Save

Once you've saved some vehicles, you can view them here at any time.

Contact Us

217-919-9499

Call Now

1330 N 24th St • Quincy, IL 62301

Get Directions

Today's Hours:

Open Today! Sales: 8am-7pm

Open Today! Service: 8am-5pm

Open Today! Parts: 8am-5pm

Shottenkirk Kia of Quincy 39.947606, -91.377104.