Why the term is not simply balance divided by payment
Interest is charged on the balance each month before your payment is applied, so part of every payment goes to interest and only the rest reduces the balance. That is why a £10,000 loan at 7% paying £300 a month takes 38 payments rather than 34.
The final payment is usually smaller than the rest. The calculator shows it separately so the schedule adds up exactly.
Worked example
A £10,000 balance at 7% with £300 a month clears in 38 payments, with a final payment of £11.82. The total interest is £1,111.82 and the total repaid is £11,111.82.
Paying £350 instead would shorten the term by several months and cut the interest, which is why the payment amount matters as much as the rate.
When the term looks too long
If the calculated term is longer than the car's useful life, the loan is likely too large for the payment. A longer term lowers the payment but raises the interest, and leaves you owing more than the car is worth for longer.
Check the final payment date against your budget and against any plans to change the car.
Inputs for the car loan length calculator
Amount you owe
The current balance, or the amount you are borrowing.
Interest rate (per year)
The yearly rate, charged monthly at one twelfth of the rate.
Monthly payment
The payment you make each month.
First payment date
The date of your next payment, used to show the final payment date.
CALCULATOR QUESTIONS
Car loan length calculator questions
How long does a £10,000 loan at 7% take at £300 a month?
38 payments, including a final payment of £11.82, with £1,111.82 of interest.
Why is the last payment smaller?
The balance rarely divides exactly by the payment. The last payment clears whatever is left.
Does overpaying shorten the term?
Yes. Extra payments go to principal, so the balance falls faster and the term shortens.
What if the payment does not cover the interest?
The balance would never fall. The calculator refuses a payment that cannot clear the loan.