# Cash Back or Low Interest Calculator

> Compare a dealer cash-back rebate with a low promotional interest rate: monthly payments, total cost and which offer saves you more money.

Category: Finance · Applies to: Worldwide · Last updated: 2026-10-29
Interactive calculator: https://calculators.geekmidst.com/calculators/cash-back-or-low-interest-calculator

Dealers often let you pick either a cash rebate or cheap financing. Taking the rebate means borrowing less at a normal rate; taking the low rate means borrowing more at a cheap one. Comparing total cost settles it.

Also called: Rebate vs low APR calculator.

## Inputs
- Purchase price (default 35000)
- Down payment (default 5000; optional)
- Loan term (unit months; default 60)
- Cash back (rebate) offered (default 3000)
- Interest rate if you take the rebate (unit %; default 6)
- Promotional low interest rate (unit %; default 1.9)
- Currency

## Results
- You save with the better offer
- Better offer
- Monthly payment with cash back
- Monthly payment with low rate
- Total cost with cash back
- Total cost with low rate
- Interest with cash back
- Interest with low rate

## Formula

```
Payment = L × i × (1 + i)^n ÷ ((1 + i)^n − 1);  Total cost = Down payment + Payment × n.  Rebate loan L = Price − Down − Rebate; low-rate loan L = Price − Down
```

Where:
- L: amount borrowed
- i: monthly rate = annual rate ÷ 12
- n: number of monthly payments

## Worked example
1. With the rebate you borrow 35,000 − 5,000 − 3,000 = $27,000 at 6% for 60 months: $521.99 a month.
2. With the low rate you borrow $30,000 at 1.9% for 60 months: $524.52 a month.
3. Total cost: 5,000 + 60 payments ≈ $36,319.14 with cash back versus ≈ $36,471.29 with the low rate.

**Result:** Here the $3,000 rebate wins by about $152 over the life of the loan, though the two are close.

## What the result means

A big rebate and a short loan favour the cash back; a long loan and a large gap between the two rates favour the low rate. If you would pay cash anyway, the rebate is pure saving.

## Assumptions and limits
- Payments are monthly at a fixed rate, and the rebate is applied to reduce the amount borrowed.
- Sales tax, registration and other fees are the same under both offers and are left out.
- It compares nominal totals and does not discount future payments.
- Promotional rates usually require top-tier credit; check that you qualify before comparing.

## Questions

### What if I would pay cash?

Then take the rebate: with no loan, a low interest rate is worth nothing to you.

### Should I take the rebate and pay the loan off early?

Paying early cuts the interest on the higher-rate rebate loan, which tilts the comparison further toward the cash back.

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_This calculator gives estimates for planning. It is not financial advice, and lenders’ actual terms, fees and rounding may differ._

Source: GM¹X CalcVerse — https://calculators.geekmidst.com/calculators/cash-back-or-low-interest-calculator