123ArticleOnline Logo
Welcome to 123ArticleOnline.com!
ALL >> Automobiles >> View Article

How To Choose Between Short-term & Long-term While Getting An Auto Loan?

By Author: jeffery reynold
Total Articles: 17
Comment this article

One of the important things that will define your car buying journey will be the length of your auto loan. An auto loan term is the time period in which you will repay the loan. Short-term auto loans vary between 12 to 60 months and long-term auto loans range between 72 to 84 months or above. Before you decide on the period of the loan, understand the implications of making a decision.

Which Auto Loan Term Is More Advantageous to You?

1) Short-Term Auto Loan

Advantages: One of the biggest advantages of choosing a short-term auto loan is that the loan is paid off earlier as compared to a longer term. It will make you less debt-ridden tomorrow. It attracts lower interest rates which means you are eventually paying less towards obtaining an auto loan. A short-term auto loan will also decrease your chances of being upside down and help you to build your equity at a faster pace compared to the other options.

Disadvantages: It has a high monthly payment. A certain part of your monthly income will be tied up towards making payments for the auto loan. It can be comfortable only if you have put a good amount of money down. Down payment can help you to attain a successful completion of a short-term auto loan.

2) Long-Term Auto Loan

Advantages: As a long-term auto loan is stretched for more than 5 years, the monthly payment is relatively lower compared to a loan that can be paid off quickly. Another advantage of choosing it is the flexibility to make payments, i.e., you can refinance your auto loan and increase the monthly payment amount to pay off your auto loan early.

Disadvantages: A long-term auto loan is not ideal as you risk being upside down for a long time. Usually refinancing is possible when your car does not have any negative equity, which is rare when you spend several years making low payments. Therefore, it becomes a task to refinance, sell or trade in a car with a long-term auto loan. Also, once your warranty runs out, it can become difficult to make expensive repairs to the car. Additionally, it will attract high interest rates, thereby increasing the cost of the auto loan.

Being Far Sighted: How do you choose an Auto Loan?

Comparing the points above, a long-term auto loan is suitable for someone who can risk a high interest rate in order to receive flexible payment options. Short-term auto loans are the ideal option only if you can manage the payments. Early repayment of the loan means that you will require a good down payment and the ability to make big payments every month. A loan period spread over several months makes sense for you if you want to make payments that are easy on your wallet. The auto loan option that you choose depends on your current financial circumstances and your ability to successfully make payments in the future.

Whether you want to go for a short-term auto loan or a long-term option, the choice is yours! Discuss your loan requirements beforehand. It’s time to find bad credit auto financing with just a click of a mouse. Apply now for bad credit auto loan approval.

Total Views: 16Word Count: 531See All articles From Author

Add Comment

Automobiles Articles

1. Weepletrucks
Author: weepletrucksindia

2. When To Go For Car Engine Repair?
Author: Nick Smith

3. Why Bridgewater Car Dealerships Are Best
Author: Bridge Water Acura

4. Lumilor Paint Cost In India Is Available At Reasonable Price

5. Automotive Repair Manual - How To Know About The Auto Mechanic Information?
Author: Justin Gabriel

6. How To Meet Client Expectations With Vehicle Tracking Application
Author: Christopher G Vella

7. Purchase The Best Roller Follower From Right Manufacturers
Author: PS Needle Roller Bearing

8. Cam Follower Bearings Manufacturer- Quality Of Bearings At Best Price
Author: PS Needle Roller Bearing

9. Handle The Load Capacity Simply With Right Bearing
Author: PS Needle Roller Bearing

10. Pick Good Quality Of Truck Spare Parts At Affordable Cost
Author: Ps Truck Parts

11. Minimize The Friction In Moving Parts With The Bearing
Author: Ps Truck Parts

12. Find Right Brake Caliper Bearing For Your Truck
Author: Ps Truck Parts

13. How A Safety Motorcycle Gear Texas Can Make A Big Difference
Author: Dickens Ben

14. Buy Perfect Spare Parts To Enhance Your Tractor Performance
Author: Ps Tractor Part

15. Make Sure Better Performance Of Vehicle With Spare Parts
Author: Ps Tractor Part

Login To Account
Login Email:
Forgot Password?
New User?
Sign Up Newsletter
Email Address: