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Long term auto loan

The normal term for an auto loan is 36-48 months. But more and more people are opting in for a 60 or even more term.

Having a long term auto loan is not the best financial decision you could make. I will show you in an example because numbers more likely speak louder than words.

Loan amount: $18,000
Short term : 36 months    APR: 5.99%    Monthly payment:     $547    Total paid: $19710
Long term: 72 months     APR: 6.7%     Monthly payment:     $304    Total paid: $21909
Money saved $2199 by using a short term loan

So even if you might think it’s a good deal to make it a long term loan you must agree that if you can save $2199 by paying $145 a month more that is the wise thing to do. You are faster out of debt and have saved $2199

A second thought is that short term auto loans have a lower APR which is even a greater reason why you should go for a short term auto loan.