Payment on $20,000 by rate and term
Financing $18,000 after a 10% deposit of $2,000. Your rate depends on your credit, and it matters more than most buyers expect.
| Rate | 4 years | 5 years | 6 years |
|---|---|---|---|
| 4% | $406.42 | $331.50 | $281.61 |
| 5.5% | $418.62 | $343.82 | $294.08 |
| 7.2% | $432.70 | $358.12 | $308.61 |
| 9% | $447.93 | $373.65 | $324.46 |
| 11% | $465.22 | $391.36 | $342.61 |
| 14% | $491.88 | $418.83 | $370.90 |
How the deposit changes it
| Down payment | Financed | Monthly | Total interest |
|---|---|---|---|
| 0% ($0) | $20,000 | $397.91 | $3,875 |
| 10% ($2,000) | $18,000 | $358.12 | $3,487 |
| 20% ($4,000) | $16,000 | $318.33 | $3,100 |
At 7.2% over 5 years, before sales tax.
What the term length actually costs
Stretching a car loan lowers the payment and raises the price. On $18,000 financed at 7.2%:
| Term | Monthly | Total interest | Saved vs 84 months |
|---|---|---|---|
| 84 months | $273 | $4,968 | — |
| 72 months | $309 | $4,220 | $748 |
| 60 months | $358 | $3,487 | $1,481 |
| 48 months | $433 | $2,770 | $2,198 |
| 36 months | $557 | $2,068 | $2,901 |
Going from 84 months to 36 costs $284 more a month and saves $2,901 in interest. The longer the term, the longer you owe more than the car is worth — a 84-month loan on a car that depreciates fastest in its first years is the usual route into negative equity.
The 20/4/10 test on $20,000
A common rule of thumb: put 20% down, take no more than a 4-year loan, and keep total transport costs under 10% of gross income. On this price that means $4,000 down and $385 a month over 48 months — which implies a household income of about $46,156 before tax, and that is before fuel, insurance and maintenance.
The 60-month term used elsewhere on this page is longer than the rule allows. That is not a reason to avoid it — most car loans written today are longer — but the table above shows what the extra 12 months cost in interest.
Check what $46,156 looks like after tax where you live — the rule is written against gross pay, but the payment comes out of net.
Frequently asked questions
What is the monthly payment on a $20,000 car?
About $358.12 a month with 10% down at 7.2% over 5 years, financing $18,000. Total interest is $3,487.
How much do I need to put down on a $20,000 car?
Nothing is required, but every dollar down reduces the payment. With no deposit the payment is $397.91; at 20% down ($4,000) it falls to $318.33 and saves $775 in interest.
What credit score do I need for a $20,000 car loan?
Lenders price by risk rather than refusing outright. The rate grid on this page shows what that costs: at 4% the payment is $331.50 over 5 years, and at 14% it is $418.83 for exactly the same car.
Other car prices
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