Running costs · free calculator
Car loan calculator: monthly payment, interest and PCP
Enter the car price, your deposit, the term and an interest rate to see the monthly payment, the total interest and how the balance falls each year. Add a final (balloon) payment to see a PCP-style deal, and a lease quote to compare all three.
Result
Monthly payment€487.3248 payments · 7.9% a year · no final payment
| Over 48 months | Car loan | PCP |
|---|---|---|
| Paid upfront | €5,000 | €5,000 |
| Monthly payment | €487.32 | €331.72 |
| Final payment | — | €8,750 |
| Interest | €3,391.37 | €4,672.65 |
| Total paid | €28,391.37 | €29,672.65 |
| At the end | You own it | Pay or return |
- Amount borrowed
- €20,000car price €25,000 minus deposit €5,000
- Number of payments
- 484 years
- Total interest
- €3,391.37
- Total amount payable
- €28,391.37deposit + all monthly payments
- PCP monthly payment
- €331.72with a final payment of €8,750 (35% of the price)
- PCP total interest
- €4,672.65if you pay the final payment and keep the car
- Amount borrowed 86%
- Interest 14%
Balance owed on the loan, year by year
- Start€20,000
- After year 1€15,574
- After year 2€10,786
- After year 3€5,605
- After year 4€0.00
Interest and capital paid each year
- Year 1€1,422 interest · €4,426 repaid
- Year 2€1,059 interest · €4,788 repaid
- Year 3€667.16 interest · €5,181 repaid
- Year 4€242.74 interest · €5,605 repaid
Interest is highest at the start: each payment covers that month's interest first, the rest reduces the balance.
Rates are examples. This is an estimate for comparison, not a credit offer or advice: the lender sets the rate, fees and approval.
Example with typical values — change the fields to calculate your own.
How the monthly payment is calculated
The amount you borrow is the car price minus your deposit. The calculator spreads it over the term as equal monthly payments (an annuity): monthly payment = amount × r ÷ (1 − (1 + r)−n), where r is the annual rate divided by 12 and n is the number of months. Each payment covers that month's interest first; the rest reduces the balance, so you pay more interest at the start and more capital towards the end.
The rate is treated as a nominal annual rate divided by 12. Lenders in the EU and the UK quote an APR that also includes compulsory fees and compounding, so a real quote with the same APR can differ slightly from this estimate. Fees, insurance products and early repayment charges are not included.
PCP and the final (balloon) payment
With personal contract purchase (PCP) and other balloon loans, part of the price is deferred to a final payment at the end of the term. The monthly payments are lower because they repay less capital, but interest is charged on the deferred amount for the whole term, so the total interest is usually higher. At the end you either pay the final payment and keep the car, hand it back, or use any equity towards the next car — the exact options and mileage limits depend on the contract.
Loan, PCP or lease?
With a loan you own the car once the last payment is made. With PCP you choose at the end. With a lease you never own the car: you pay for using it, usually with a mileage limit and charges for excess wear. The comparison adds up what you pay over the same term so you can see the difference, but the totals buy different things — ownership, a choice, or use only.
Representative example
Borrowing €20,000 over 48 months at a fixed 7.9% a year gives 48 monthly payments of €487.32, total interest of €3,391.37 and a total amount payable of €23,391.37. This example only illustrates the maths: rates are examples, not an offer. This calculator is not credit advice or a credit offer; the rate, fees and approval are decided by the lender. Borrowing costs money — make sure you can afford the repayments for the whole term.
Frequently asked questions
How is a car loan payment calculated?
The amount borrowed (price minus deposit) is repaid in equal monthly payments: amount × r ÷ (1 − (1 + r)^−n), where r is the yearly rate ÷ 12 and n is the number of months. With a final payment, that amount is taken out of the monthly instalments and paid at the end.
What is APR?
The annual percentage rate is the yearly cost of borrowing. In the EU and the UK the APR must include compulsory fees, which makes offers easier to compare. A lower APR means a cheaper loan for the same amount and term.
Is PCP cheaper than a car loan?
PCP usually has lower monthly payments, but because part of the price is deferred, interest runs on it for the whole term — the total interest is normally higher, and you must pay the final payment to keep the car.
Does a bigger deposit or a shorter term save money?
Yes. A bigger deposit reduces the amount you borrow, and a shorter term means fewer months of interest. Both raise or lower the monthly payment, so check what you can afford comfortably.