Car Loan Calculator Canada

Car loans use standard compounding, not the semi-annual compounding mortgages use. The periodic rate is simply the annual rate divided by the number of payments per year — for example, a 6.5% loan paid monthly has a rate of 0.542% per month. That periodic rate is then applied to a standard amortization formula to find your payment.

Provincial sales tax on the vehicle purchase varies by province — some charge combined HST, others GST plus a separate provincial sales tax. Add applicable sales tax to the vehicle price before entering it as your loan principal, since lenders typically finance the tax-inclusive price if you don't pay it upfront.

Biweekly payments (26 per year) split your monthly amount roughly in half but you make 26 of them instead of 24 semi-monthly equivalents, so you pay slightly more principal over a year and can shave time off the loan. The calculator lets you compare both frequencies for the same rate and term.

A larger down payment reduces the loan amount, which lowers both your payment and total interest paid over the term — cars depreciate quickly, so a bigger down payment also reduces the risk of owing more than the car is worth. Enter different down payment amounts to compare the resulting payment and total cost.

Shorter terms mean higher monthly payments but far less total interest, since less time is spent accruing interest on the balance. Longer terms lower the payment but increase total interest cost and the odds the loan outlasts the car's useful resale value. Compare a few term lengths in the calculator to see the trade-off in dollars.