Guides / Loans, leases, trade-ins
Car loan basics: APR, term and total interest
How loan length and rate change what you really pay.
A longer loan lowers the monthly payment but usually raises the total interest you pay, and can leave you owing more than the car is worth for longer.
Know these numbers
- APR: the yearly cost of the loan including certain fees
- Term: the number of months
- Amount financed
- Total of payments: what you'll pay over the life of the loan
Get pre-approved
- Check your credit report for errors first.
- Get a pre-approval from a bank or credit union before visiting dealers.
- Let the dealer try to beat it, and compare the APR and total of payments.
Be careful with
- Very long terms (72 to 84 months)
- Rolling negative equity from a trade-in into a new loan
- Add-ons financed into the loan
General information, not financial advice. Read the Truth in Lending disclosure on any loan. Easy Auto Compare isn't a dealer, lender or insurer and takes no referral fees.