First Bank of Charleston First Bank of Charleston First Bank of Charleston
First Bank of Charleston First Bank of Charleston First Bank of Charleston
First Bank of Charleston   First Bank of Charleston
Auto Equity Loan Calculator
 
This calculator will compare the net monthly cost of a traditional installment loan versus using a home equity loan to finance the purchase of an automobile. A home equity loan can have a higher rate and higher costs, but those are often offset by the tax savings on the interest paid.

The amount I need to borrow is:    Example: 35000.00
Term of Loan:    Example: 60 = 60 months
 
Auto Loan

Annual Percentage Rate:    Example: 4.5 = 4.5%
 
Home Equity Loan

Annual Percentage Rate:    Example: 6 = 6%
Up-Front Cost of Home Equity Loan:    Example: 150.00
Overall (State+Federal) Income Tax Rate:    Example: 25 = 25%
 
   

With a purchase price of $1.00, and an annual interest rate of 1.0%, a 1.0 month auto loan will result in an auto loan payment of about $1.00 per month.
With an annual interest rate of 1.0%, a 1.0 month home equity loan will have a payment of about $1.00 per month. There is an additional up-front loan fee of $1.00 which is countered by tax savings equal to $0.02 of interest paid over the life of the loan.
Please note that this analysis is useful for comparison purposes but does not take into consideration other variables that could change the actual costs. It does not consider:
 
  • Payment changes with a variable rate home equity loan The loan payment on a home equity loan will change if it is based on an adjustable rate loan. This analysis assumes the home equity rate is constant.
  • Tax rate changes The tax rate you enter may not be the actual rate in future years due to income changes and/or tax law changes.
  • Future dollar savings are not discounted to a present value Since tax savings that occur in the future are not discounted to a present value, the comparison does not reflect the time value of the dollar savings.
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    Auto Loan Payment Schedule
    Schedule of Payments for a Loan of $1.00 at 1.0% Repaid Over 1.0 Months
    Remaining Principle Principal Paid Interest Paid
    $1.00 ($0.99) $1.99
     
    Home Equity Loan Payment Schedule
    Schedule of Payments for a Loan of $1.00 at 1.0% Repaid Over 1.0 Months
    Remaining Principle Principal Paid Interest Paid
    $1.00 ($0.99) $1.99
     
    With an overall tax rate of 1.0%, your interest deduction of $1.99 will produce tax savings of $0.02 over the 1.0 months shown here.

    This calculator is provided to give you an estimate of the payment and terms of a loan program or product. It is intended as a tool to use for estimating and is not guaranteed to provide the exact results that you may see with a particular product or plan, nor is it guaranteed to provide an accurate rate as required by truth-in-lending regulations. Results obtained with this calculator should be discussed with a qualified professional before any product purchases or loan commitments are made. Any loans made as a result of product inquiries to this institution are subject to credit, property, and/or collateral approval as well as other terms and conditions that may not be mentioned on this page.
     
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