Mrinmoy Roy
If you’re looking to calculate your auto loan payment in Excel, there are a few things you’ll need to know. First, you’ll need to know the loan amount, the interest rate, and the term of the loan. You can find this information on your loan paperwork or by contacting your lender. Once you have that information, you’ll need to open up a new Excel spreadsheet and then you can start calculating. In this article, I will help you to calculate an auto loan payment in Excel with ease. So, without having any further discussion, let’s get straight into the topic.
Download Practice Workbook
You can download the Excel file from the following link and practice along with it.
What Is Auto Loan Payment?
When you finance a car, you are essentially taking out a loan from a financial institution in order to pay for the vehicle. The loan will have a set interest rate, and you will be required to make monthly payments until the loan is paid off. The size of your monthly payment will depend on the amount you are financing, the interest rate, and the length of the loan (usually expressed in months).
For example, let’s say you are financing $20,000 for a new car at 4% interest for 60 months. Your monthly payment would be $377.42. This means that every month for the next five years, you would need to pay $377.42 to the lender. At the end of the 60 months, you would have paid a total of $22,649.20, which would include the original $20,000 loan amount, plus interest.
It’s important to note that you don’t have to finance the entire cost of the car. You can put down a down payment (usually 10-20% of the total cost) and only finance the remaining amount. Doing so would lower your monthly payment as well as the interest amount that you need to pay back.
Steps to Calculate Auto Loan Payment in Excel
Step-1: Calculate Due Amount after Purchasing a Car
Let’s assume you have the following data:
- Car Selling Price: $80,000.
- Additional Charges: $2,000.
- Down Payment: $20,000.
- Trade-in Value: $8,000.
- Rebates: $1,000.
Now follow the steps below to calculate the amount due.
❶ First, insert the following formula using the SUM function in cell C9.
=SUM(C4:C5)-SUM(C6:C8)❷ After that hit the ENTER button.
Formula Breakdown
- SUM(C4:C5) returns the sum of the price you need to pay to buy your car.
- SUM(C6:C8) calculates the total amount you’ve paid directly or indirectly.
- SUM(C4:C5)-SUM(C6:C8) subtracts the amount you paid for buying your car from the net price of your car. Thus, you get the amount that is due.
Step-2: Find Out Monthly Payment Amount
Now you have the following data:
- Amount Due: $53,000.
- Total Payment Term: 60.
- Annual Interest Rate: 5%.
To calculate the monthly payment amount follow the steps below:
❶ Insert the following formula in cell F7.
=-PMT(F6/12,F5,F4)❷ Then press the ENTER button.
Formula Breakdown
- F6 is the annual interest rate.
- F5 is the total payment term.
- F4 is the amount due.
- -PMT(F6/12,F5,F4) calculates the monthly amount that you need to pay back. The PMT function returns a negative value. But the payment amount is a positive number. Thus a minus sign has been used before the PMT function.
Read More: How to Calculate Monthly Payment with APR in Excel
Similar Readings
- How to Calculate Down Payment in Excel Using VLOOKUP
- Calculate Balloon Payment in Excel (2 Easy Methods)
Step-3: Calculate Total Payment Amount You Need to Pay Back
To calculate the total payment amount against the car purchase, follow the steps below:
❶ Insert the following formula in cell F8.
=F7*F5❷ Then hit the ENTER button.
Formula Breakdown
- F7 is the monthly payment amount.
- F5 is the total payment term.
Step-4: Find Out Total Interest Amount You Will Pay Back
Finally, it’s time to calculate the total interest amount that you will pay back against your car purchase.
To do that,
❶ Insert the following formula in cell F9.
=F8-F4❷ Then hit the ENTER button.
Formula Breakdown
- F8 refers to the total payment that you need to pay back against your car purchase.
- F4 is the due amount after your down payment while purchasing the car.
Auto Loan Payment Calculator
You will find the following auto loan payment calculator at the end of the provided Excel file. You can use the calculator to calculate an auto loan payment quite easily. All the necessary formulas are already applied in the calculator, just you need to input your purchase data. The calculator will do the rest.
Conclusion
To sum up, I have discussed steps to calculate an auto loan payment in Excel. Please don’t hesitate to ask any questions in the comment section below. We will try to respond to all the relevant queries asap. And please visit our website Exceldemy to explore more.
