The monthly loan payment on a fixed-rate installment loan is found with the standard amortization formula. For a $20,000 loan at 4% annual interest over 60 months, compute the monthly interest rate as 0.04/12 = 0.0033333333. The payment equals P × r / (1 − (1 + r)^−n). Plugging in P = 20,000, r ≈ 0.0033333333, n = 60 gives a monthly principal-and-interest payment of about $368.33. This number is the contractual payment that will amortize the loan over the 60-month term if all payments are made on schedule. When budgeting for car ownership, the loan payment is only one component — you also need to include predictable recurring costs such as insurance and maintenance and smaller recurring fees like registration.

Adding the recurring items produces the total monthly ownership cost: insurance $120 + maintenance $50 + registration $10 sums to $180. Add the loan payment of approximately $368.33 and you get about $548.33 per month. Round sensibly for budgeting (e.g., $548). That figure helps you compare offers: if a different loan term or rate reduces financing costs, or if you choose a less-expensive model, it will alter the monthly total; likewise higher insurance or estimated maintenance increases it. Use the full monthly total for affordability checks, not the loan payment alone. Finally, build a modest contingency (e.g., $50–$100) into your monthly budget to cover spikes in maintenance or seasonal insurance changes.