$35,000 Car Loan over 3 years: what it costs each month
What a $35,000 car loan over 3 years costs at different rates
The rate you are offered depends on your credit score (FICO or VantageScore), your income and how much you borrow. The same $35,000 over 3 years can cost very different amounts, so it is worth seeing the whole range before you apply.
Moving the rate by one percentage point, from 7% to 8%, changes the monthly payment by about $16.07 and the total interest by about $579.
$35,000 over 3 years by interest rate
| APR | Monthly payment | Total interest | Total repaid |
|---|---|---|---|
| 4% | $1,033.34 | $2,200 | $37,200 |
| 5.5% | $1,056.86 | $3,047 | $38,047 |
| 7% | $1,080.70 | $3,905 | $38,905 |
| 9% | $1,112.99 | $5,068 | $40,068 |
| 12% | $1,162.50 | $6,850 | $41,850 |
| 15% | $1,213.29 | $8,678 | $43,678 |
Fixed rate, equal monthly payments, no fees.
The formula behind the payment
The payment on a fixed-rate loan is: amount × monthly rate ÷ (1 − (1 + monthly rate)−months). For $35,000 over 36 months at 7% APR the monthly rate is 0.5833%, which gives $1,080.70. Multiplying by 36 months gives $38,905 repaid in total, so the cost of borrowing is $3,905.
Should you borrow $35,000 over 3 years or a different term?
A longer term lowers the monthly payment but you pay interest for longer. At 7% APR, repaying $35,000 over 3 years costs $1,080.70 a month and $3,905 in interest, while 7 years costs $528.24 a month and $9,372 in interest. That is $5,467 more for the lower payment.
$35,000 at 7% APR by term
| Term | Monthly payment | Total interest | Total repaid |
|---|---|---|---|
| 3 years | $1,080.70 | $3,905 | $38,905 |
| 4 years | $838.12 | $5,230 | $40,230 |
| 5 years | $693.04 | $6,583 | $41,583 |
| 6 years | $596.72 | $7,963 | $42,963 |
| 7 years | $528.24 | $9,372 | $44,372 |
Interest versus capital: where your payments go
Early payments are mostly interest. In year 1 of this $35,000 loan, $2,106 of your $12,968 goes on interest and $10,862 reduces what you owe. By the last year the split reverses, which is why paying off a loan early saves more in the early years than the later ones.
$35,000 at 7% APR over 3 years
| Year | Interest paid | Capital repaid | Balance left |
|---|---|---|---|
| 1 | $2,106 | $10,862 | $24,138 |
| 2 | $1,321 | $11,648 | $12,490 |
| 3 | $479 | $12,490 | $0 |
Totals for each year of the loan.
What happens if you overpay your $35,000 loan?
Paying a little extra each month cuts the balance faster, so less interest is charged. Check that your lender allows overpayments and whether there is a charge: many allow up to a set amount a year without one.
Overpaying a $35,000 loan at 7% APR
| Extra payment | New monthly payment | Loan cleared in | Interest saved |
|---|---|---|---|
| +$110 a month | $1,190.70 | 33 months | $398 |
| +$220 a month | $1,300.70 | 30 months | $720 |
| +$440 a month | $1,520.70 | 25 months | $1,211 |
Compared with the normal 3 years term. Fixed rate, no fees.
How to work out if the payment is affordable
A common check is to keep all debt repayments, including this car loan, below about a third of your take-home pay. A $1,080.70 payment fits that guide if your monthly take-home pay is at least $3,242.
Also look at what happens if your income drops. Choose a payment you could still make for several months without borrowing again.
What to check before you sign
- Compare offers from banks, credit unions and online lenders. Prequalifying with a soft credit check does not affect your credit score.
- Ask about origination fees, which are taken from the loan amount and raise the true cost.
- Check for a prepayment penalty. Most lenders do not charge one, but some do.
- Credit unions often offer lower rates than banks for members with fair credit.
Ways to pay less interest
- Pick the shortest term whose monthly payment you can comfortably afford. Going from 7 years to 3 years would save $5,467 on this loan.
- Improve your credit score before you apply: pay bills on time, keep card balances low and dispute errors on your reports.
- Make extra payments when you can, as long as there is no penalty. Each extra payment cuts the balance that interest is charged on.
- Borrow only what you need: every extra $1,000 at 7% over 3 years adds about $30.88 to the monthly payment.
Sources and further reading
Questions people ask
How much is a $35,000 car loan per month over 3 years?
How much interest will I pay on $35,000 over 3 years?
Is it cheaper to borrow $35,000 over a shorter time?
What income do I need for a $35,000 car loan?
Does this calculator include fees?
Results are estimates for information only, not financial advice. Read the full disclaimer.