Tools
Car Loan Payment Calculator
Estimate your monthly payment and total interest for a used car loan in Canada. Adjust the vehicle price, down payment, rate, and term to model different scenarios.
Loan details
Optional
Monthly payment
$405.43
for 60 months
- Loan amount
- $20,000
- Total interest
- $4,326
- Total cost
- $24,326
Note: This estimate excludes taxes, fees, and dealer charges. Actual payments may vary. Always confirm terms with your lender.
How car loans work in Canada
When you finance a used car in Canada, the lender pays the dealer on your behalf and you repay the lender over an agreed term — typically 24 to 96 months. Your monthly payment covers both the principal (the amount borrowed) and interest. The longer the term, the lower each payment, but the more interest you pay overall.
Most Canadian lenders quote rates as an Annual Percentage Rate (APR). On a 5-year loan at 7.99% APR, for example, the monthly rate is roughly 0.67%. Interest compounds monthly, so a higher rate or longer term meaningfully increases the total cost.
What affects your interest rate?
- Credit score
- Your Equifax or TransUnion score is the single biggest factor. Scores above 720 typically unlock the best rates; below 600 you may face sub-prime rates of 15–29% or need a co-signer.
- Down payment
- A larger down payment lowers the loan-to-value (LTV) ratio, reducing lender risk. Putting 20% or more down often qualifies you for a lower rate and eliminates the need for dealer add-ons.
- Vehicle age and mileage
- Lenders see older, high-mileage vehicles as riskier collateral. Cars over 10 years old or with more than 150,000 km typically attract higher rates or shorter maximum terms.
- Loan term
- Shorter terms (24–48 months) usually carry lower rates because the lender's exposure window is smaller. Longer terms (72–96 months) spread payments out but cost more in interest.
- Lender type
- Banks and credit unions often beat dealer-arranged financing. It pays to get pre-approved before you shop so you walk into the dealership knowing your rate.
Tips for reducing what you pay
- Get pre-approved by your bank or credit union before visiting dealers — you'll negotiate from a stronger position.
- Improve your credit score before applying: pay down balances, correct errors on your report, and avoid new credit inquiries.
- Make a larger down payment to lower your loan amount and potentially your rate.
- Choose the shortest term you can comfortably afford. Every extra month in the term adds more interest.
- Consider a used car over a new one — the price gap often exceeds any new-car incentive rate.
- Shop around. Major banks, credit unions, and online lenders all compete for your business.
- Avoid rolling add-ons (extended warranties, insurance products) into the loan — you'll pay interest on them for years.
Typical car loan rates in Canada (2024–2025)
| Credit profile | Approximate APR range |
|---|---|
| Excellent (720+) | 6% – 9% |
| Good (660–719) | 9% – 13% |
| Fair (600–659) | 13% – 19% |
| Poor (below 600) | 19% – 29%+ |
Rates vary by lender, vehicle age, loan term, and market conditions. These ranges are illustrative only.
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