When it comes down to it, you are responsible for your finances. Unfortunately, there are times when things that are beyond your control happen to your finances. For instance, it can be really frustrating to deal with problems with your home or garden, especially when there are problems like leaks or issues with structure. However, by getting a loan, you can fix your situation without ruining your finances. I started focusing more and more on money services after I began experiencing financial strains, and it made it easier for me to cope with the situation. Find out great advice about loans on this blog.
As you shop for an auto loan, you will be presented with a number of choices. One of the most important choices that affects both your financial success and emotional outlook is the length of the loan.
Most auto lenders today offer several standard choices for term length: 36 months, 48 months, and 60 months. Which should you choose? To help you find the right size loan for your own circumstances, here are a few situations in which each is ideal.
36-Month Loans
The three-year loan is the most traditional time length, but it will carry the highest monthly payments. If you don't plan to keep the vehicle for many years, this term allows you to pay it off before you decide to sell it and move on.
This shorter loan will also generally come with the lowest overall added interest, so it's perfect for a buyer who has the additional wiggle room in their budget and wants to save money. Those who have a larger down payment can also put more down to reduce the monthly installments of the 36-month loan.
48-Month Loans
A nice middle ground between short and long loans is the four-year term. If you can't quite afford the higher payments of the 36-month loans, opting to add an additional year may make things much easier. You'll pay more in interest, but you'll also have a lower payment.
The four-year loan is also a good threshold to decide if you really can afford a particular vehicle. If you have to stretch things beyond this threshold for affordability, a budget-minded buyer might want to look at a different vehicle.
60-Month Loans
With today's cars and trucks lasting longer than ever, lenders can offer longer-term loans as a viable option. If you plan to keep this vehicle for the long term, you don't necessarily need to rush to pay it off. And with the lowest monthly installments, you won't have to worry nearly as much about making the payment.
A longer loan is very beneficial for those with fluctuating monthly income. You can pay the mandatory minimum each month more easily and add in extra principal payments at times when your income is higher. This method saves money and reduces stress.
The right answer to which loan is best for you depends on your financial circumstances and your goals. Learn more by meeting with an auto loan service in your area today.