 TITLE: How to Calculate an Affordable Car Payment CONTENT: How a Car Payment Works\n-----------------------\nJust like any other loan, a car payment will have interest and a set term. Depending on your financial situation and creditworthiness, your car payment could be much more or much less than someone else's, even for the same vehicle. It's important to understand how these payments are calculated so you know if you're getting the best deal possible.\nFirst, be aware of the term, or over how many months your loan will be spread, because the longer you're paying interest, the more expensive the car becomes.\nImagine these scenarios:\n1.  You put a $1,500 down payment on a $15,000 car. Your interest rate is 5.35% and the term of the loan is 48 months. With this calculation, you'd be financing $13,500, and your monthly payment would be $313. The total interest paid on the loan would be $1,524 over the life of the loan.\n2.  Now imagine buying the same car as above, but instead your loan term is 60 months. With the same interest rate, your monthly loan payment goes down to $257, but your total interest paid increases to $1,920.\nWhile a shorter-term loan will typically have a higher monthly payment, the total cost will usually be less depending on your interest rate and term. If you can afford it, paying more each month will allow you to get rid of your car payment quicker and pay less in interest. END