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Microsoft's Excel spreadsheet program can be used for many different types of business and personal applications. For instance, you can use Excel to calculate car loan transactions and payment amounts as well as the total interest paid over the life of a loan. In addition, you can use Excel to compare multiple scenarios in order to make sound financial decisions. Here's how to calculate a car loan in Excel before you make a commitment.

  1. [1]
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  2. Car sale price, Trade-in value, Down payment, Rebates, Additional charges and Amount financed.[2]
    • The car sale price is negotiated with the dealership.
    • The dealer incentive, rebates and additional features items may not apply to your situation.
  3. Calculate the amount financed in cell B6 by entering "=B1-B2-B3-B4+B5" in the cell, without quotation marks, and pressing "Enter."
  4. Amount financed, Interest rate, Loan Term and Payment amount.[3]
    • Type "=B6," without quotation marks, in cell E1 to copy over the amount financed.
    • Make sure your interest rate is entered as a percentage in cell E2.
    • Enter the loan term in months in cell E3.
  5. "=PMT(E2/12,E3,E1)."[4]
  6. Add up the total interest paid over the life of the loan in cell E5 by entering the following formula, without quotation marks: "=(-E4*E3)-E1. In this step we must add the Amount Financed (E1) - this may seem counterintuitive, but because Excel correctly treats our calculated Payment as a cash outflow and assigns it a negative value, we must add back the Amount Financed to reach a Total Interest Paid amount."[5]
    • This formula calculates the total of all payments less the amount financed to arrive at the total interest paid over the life of the loan.
    • You can see how the scenario would look with a higher or lower interest rate, a shorter or longer loan term or with a larger down payment.
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Tips

  • Make sure you are entering the annual percentage rate in cell E2. Note that the interest rate is divided by 12 in the formula in cell E4 to represent a monthly interest rate for each period in the term.
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Things You'll Need

  • Computer
  • Excel
  • Car transaction and loan details

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About This Article

Bryan Hamby
Co-authored by:
Professional Auto Broker
This article was co-authored by Bryan Hamby. Bryan Hamby is the owner of Auto Broker Club, a trusted auto brokerage in Los Angeles, California. He founded Auto Broker Club in 2014 out of a passion for cars and a unique talent for customizing the car dealership process to be on the buyer’s side. With 1,400+ deals closed, and a 90% customer retention rate, Bryan’s focus is to simplify the car buying experience through transparency, fair pricing, and world class customer service. This article has been viewed 285,454 times.
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Co-authors: 10
Updated: December 30, 2023
Views: 285,454
Categories: Microsoft Excel
Thanks to all authors for creating a page that has been read 285,454 times.

Reader Success Stories

  • Dale Stiles

    Dale Stiles

    Apr 11, 2016

    "These instructions also work very well in Google Sheets where I first created it. I then recreated it in Excel for..." more
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