Published 13 July 2026
Car loan calculator
Estimate car loan repayments, with or without a balloon payment at the end of the term.
How are car loan repayments calculated?
A car loan without a balloon is a plain amortised loan. One fixed instalment covers each period's interest and part of the debt. By the end of the term the balance is zero.
Repayments scale in a straight line with the amount financed. A $50,000 loan is five lots of that: $1,014 a month at the same rate and term.
A shorter term costs more each month and less overall. Cutting the worked example from 5 years to 3 lifts the instalment to $1,097. But it cuts interest to $4,478. That is $3,092 less than the five-year version. Car loans reward short terms. The amounts are small enough for the higher instalment to stay absorbable. And the car itself is losing value while the loan runs.
What does a balloon payment actually do?
A balloon, also called a residual, is a lump sum that falls due when the term ends. Part of the amount financed is deferred into it, and only the remainder is paid down. On the worked example, a $10,500 balloon is three tenths of the amount financed. It cuts the monthly repayment from $710 to $567. That is $143 a month less (worked example throughout this section).
The cost of that relief is interest. The balloon portion of the debt is never paid down during the term. So interest builds on it for the full five years. The total paid rises from $42,570 to $44,494: $1,924 more for the same car. A balloon buys a lower instalment, not a cheaper loan.
The lump sum itself still has to be dealt with when the term ends. There are three ways:
- Pay it from savings.
- Refinance it into a new loan, at whatever rates then apply.
- Sell the car to cover it.
If the car is worth less than the balloon at that point, the gap comes out of other money. Resale values are outside this calculator's scope, which is listed with its limitations.
What interest rate do car loans charge?
No official average exists for car loan rates. The RBA publishes no car-loan rate series. Its unsecured personal term-loan series ended in February 2020. The averages that remain bracket the range. Secured lending against housing averaged 6.8 per cent (discounted variable, owner-occupier) in June 2026. Unsecured revolving credit ran from 13.49 per cent on low-rate cards to 20.99 per cent on standard cards1.
A loan secured against a newer car tends to price near the low end of that range. A loan on an older car, or with no security, tends to price near the high end. So the only number to rely on is the one on a written quote for the actual car.
What does the calculator leave out?
The car-buying costs that surround the loan:
- Establishment and account fees on the loan.
- Dealer origination charges (the dealer fee for setting up the finance).
- Comprehensive insurance, which lenders typically require.
- Registration and stamp duty on the vehicle.
On loans this size, fees shift the total cost more than a small rate difference. So real offers need to be compared on their comparison rates. A comparison rate folds the fees in. It is specific to each lender and amount. The projection also holds one rate for the whole term, while some car finance is variable.
Approval is out of scope as well. The figures are the mathematics of the numbers entered. They are not what any lender would offer for one specific car, borrower or balloon structure. For general borrowing with no vehicle attached, the loan repayment calculator runs the same arithmetic without the balloon machinery.
Car loan questions
What are the repayments on a $35,000 car loan?
At 7.99 per cent over 5 years with no balloon, $710 a month (worked example). Interest over the term comes to $7,570. The calculator reworks the figures for any amount, rate, term or balloon.
What is a balloon payment on a car loan?
A lump sum, agreed upfront, that falls due when the loan term ends. Only the rest of the amount financed is paid down during the term. On the worked example a $10,500 balloon cuts repayments by $143 a month. But it adds $1,924 of interest. And the lump sum still has to be paid, refinanced or covered by selling the car.
Does a balloon payment save money?
No: it costs money. The balloon portion is never paid down during the term, so it collects interest for the whole term. The total paid always exceeds the no-balloon version of the same loan. A balloon buys a lower instalment during the term. The price is a larger total and a lump sum owed at the end.
What interest rate should a car loan calculator use?
The rate on a written quote for the actual car. No official average is published for car loans. The RBA's June 2026 figures put secured housing lending at 6.8 per cent and low-rate credit cards at 13.49 per cent. Secured car loans generally price between those poles.
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References
- RBA, Indicator Lending Rates (Statistical Table F5)Reserve Bank of AustraliaPublished 2026-06-01 · Retrieved 2026-09-10