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Home / Loan amortization / $20,000 over 7 years

$20,000 Auto Loan Payment Over 7 Years

How big is the monthly bill on $20,000 borrowed for 7 years? Find out below with a starting rate of 8 percent. Every box can be edited.

On the starting figures the payment is $311.72 a month and the total interest is $6,185.

$
%
years
$
Monthly payment
$311.72
Total interest
$6,185
Total paid
$26,185
Year by year
YearPrincipal paidInterest paidBalance left
1$2,221$1,520$17,779
2$2,405$1,335$15,374
3$2,605$1,136$12,769
4$2,821$920$9,948
5$3,055$685$6,892
6$3,309$432$3,584
7$3,584$157$0
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How the payment is worked out

A level payment loan has a neat rule behind it. Each month the interest is the balance times 0.6667 percent. The payment is set so that after 84 months the balance lands exactly at zero. Solving for it on $20,000 gives the loan times the monthly rate, divided by one minus one over one plus the monthly rate raised to the power of 84.

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Worked example

Worked through, $20,000 at 8 percent for 7 years gives a payment of $311.72. The first month splits into $133.33 of interest and $178.39 of principal.

After 4 years of payments you would still owe $9,948. Total interest over the whole loan is $6,185.

Questions about this calculator

What if the rate on a $20,000 car loan over 7 years were one point higher?

The payment would rise from $311.72 to $321.78, which is $10.06 more each month. One point lower would give $301.85.

Would paying $30 extra each month shorten a $20,000 car loan over 7 years?

Yes. On this $20,000 loan an extra $30 each month ends the loan 9 months sooner and saves $748 of interest.

Is 7 years the right length for a $20,000 car loan?

It depends on the monthly payment you can carry. At 8 percent this term costs $311.72 a month. A 5-year term would cost $405.53 a month and $4,332 in interest, compared with $6,185 over 7 years.

Does adding a year to a $20,000 car loan over 7 years change the cost much?

Yes. At 8 percent a 7-year term costs $6,185 in interest. A 8-year term would lower the payment to $282.73 but raise interest to $7,142.

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This page is for education only and is not financial or tax advice.