Find out with our car loan repayment calculator

Rapid Finance on 15 January 2024

How to calculate car loan repayments

Working out your car loan repayments doesn't have to be difficult. Simply, remember, when it comes to your car loan repayments, there are four main components which determine how much you pay.

Those four components are:

  1. Loan amount
  2. Interest rate
  3. Loan term
  4. Payment frequency

You'll need all four to work out your car loan repayments. So, if you don't have them all, collect them now. Once, you've got them, just input them into our car loan repayment calculator via the link below.

How to lower your car loan repayments

The conventional wisdom for reducing car loan repayments is to find a loan which has a lower interest rate. And it's true. Even a difference of half a percent can make a big difference over a three-year loan term.

Here's the same loan, only with a different interest rate. See the difference in repayment costs.

Loan amountLoan termInterest rate*Fortnightly repaymentDifference


3 years





3 years





3 years




As you can see, in this instance, the difference in interest rate can mean between $40 and almost $100 extra in repayment costs, every fortnight.

*These rates are used for illustrative purposes only, and may not reflect the lowest or highest rate available to you. For information specific to your situation, speak with a finance professional.

How to get a car loan with a lower interest rate

Different lenders offer different interest rates. Some are higher. Others are lower.

A common trap that people fall into is simply going to their bank (often one of the big four) for their car loan. But their bank doesn't always offer the lowest interest rate available. 

To avoid this regular misstep, speak with a car finance broker.

You might not think about car loans every day, but a car finance broker does. They're essentially experts in car loans. They have access to a bunch of loans and lenders. And by comparing them, they may be able to find you one with a lower interest rate, fewer fees or more suitable features.

So, don't settle for what your bank says. Try a car finance broker. It could save you a packet.

Rapid Finance are also experts in getting bad credit car loans approved - we're here to help!

Lower your car loan repayments with your loan term

'Car loan term' literally means the length of your loan. Or, the amount of time over which you will repay the loan. Car loans typically come with one of three loan terms:

  • 3 years
  • 5 years
  • 7 years

Other terms are available. However, car loan terms usually do not come in under 1 year or exceed 7 years.

With regards to car loan repayments and car loan terms, there are two important things to remember.

  1. The longer your car loan term, the lower your regular repayments
  2. The shorter your car loan term, the less you will pay overall

How car loan terms affect your repayments

Here's the same $50,000 car loan which we used as an example before. The difference this time is not the interest rate, but the car loan term. See the difference.

Loan amountLoan termInterest rateFortnightly repaymentDifference


3 years





4 years





5 years




 As you can see, the loan term can make a big difference to your regular repayments. The drawback, of course, is that the longer your loan term, the more you'll pay in interest overall.

Ultimately, you want to choose a loan term that is long enough that you get manageable car loan repayments, but that is short enough that you don't pay the maximum amount of interest.

Choosing the right loan repayment frequency

Car loan repayments typically come in one of three frequencies. In select cases, other arrangements can be made. Most likely, though, you will be making your repayments either:

  • Weekly
  • Fortnightly
  • Monthly

The more frequently you pay, the less you pay in each repayment.

Weekly, fortnightly or monthly

huy in a car smiling

The choice, therefore, is either pay a little every week. A moderate amount every fortnight. Or pay nothing each week and then pay a larger lump sum at the end of the month.

It can be tempting to put off your payments until the end of the month and pay all at once. But, this isn't always the best solution. Similarly, paying a little every week can be tempting too, but may not be practical if you have irregular cash-flow or a monthly payment cycle.

If possible, match your repayments to your pay cycle. That way you can manage your cash in and cash out more easily. You simply make your repayment as soon as your pay comes in.

Loan amount. How much should I borrow?

There's no factor like loan amount for determining how much you will pay in car loan repayments. Simply put, the more you borrow, the more you need to repay over the lifetime of the loan.

The solution may seem simple. Just borrow less. 

However, like many things in life, it's often not about a low price, but good value.

Why borrowing more could save you in the long term

When it comes to car ownership, your car loan is just one of your potential costs. You will still need to consider a range of other running and maintenance expenses. Including:

  • Insurance
  • Petrol
  • Maintenance & servicing
  • Any repairs
  • Registration

You'll need to consider all of these when choosing a car, as they all affect your total costs. Because there are many 'cheap' new and used vehicles on the market today. However, they don't all represent good value when you compare the ongoing costs.

For example: a new car's low purchase price may make it seem like a steal. But, if you're constantly filling it up due to the vehicle's poor fuel consumption, then you're likely to pay more in the finish.

Similarly, you may be able to pick up a low-priced second-hand vehicle. But, if you're regularly paying for repairs and maintenance due to the carelessness of the previous owner, it's probably not cheaper overall.

This is why borrowing a little more to get value and not just a cheap price could save you.

"Ultimately you should choose a car loan with repayments that are right for your situation and budget."

Take the first step toward your car loan

At Rapid Finance, we are one of Australia's car finance specialists. Every day, we help drivers across the country to find car loans with repayments that match their circumstances and budget.

We may be able to help you, too. For more information on car finance or to find out how much you may be eligible to borrow, get in touch today. Our car loan specialists are here to help.

Learn more on our car loans page or call 1300 467 274 to get started.