Before applying for bad credit auto loans, or any other financing for that matter, it is important that the borrower knows what monthly payments that he/she is going to give the lender or the dealership. Calculations can be done on online calculators which are available on lending websites but if an individual is good with simple mathematics, then he/she can follow the below mentioned tips to calculate the monthly payment for bad credit auto loans.

Suppose the cost of the car is 21000 dollars. This cost is inclusive of all taxes that one is going to pay. The cost can be increased if the borrower wishes for insurance along with the core auto financing. Let the down payment be 3000 dollars. The payment to be put down can depend on the applicant and the lender. There are lenders who do not accept down payment but it is best to put some money down. The amount financed turns out to be 18000 dollars.

The next value is the term of the loan which can be between 24 and 72 months. Let the term be five years in this instance. The yearly amount becomes 3600 dollars or 300 dollars a month.

The last input is the rate of interest that one wishes to pay. For this instance, let the rate be 10%. The way in which the interest is charged can depend on the lender. Usually, the interest is charged for the whole term. For this example, the interest charged becomes 1800 dollars or 30 dollars a month. Therefore, the final monthly payment becomes 330 dollars. These steps can be used to calculate the payment according to the car one wishes to buy and its cost.