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Short or Long Term Car Loan In Halton Hills?

Short or Long Term Car Loan In Halton Hills?

Which is better, taking a short or long term car loan in Halton Hills? As is so often the case with these types of questions, there is no perfect option. Only the right option for your personal situation.


This is another of our blog posts that won’t make your mind up for you but will outline the pros and cons of a short or long term car loan, so you can make your own decision.


The pros of shorter auto loans in Halton Hills


There are a couple of plus points for shorter auto loans in Halton Hills. The most obvious is having a shorter period with which to pay off the loan. Having a loan over 36 months means only three years paying it. A longer loan of 72 months or so means more years of paying the loan.


There’s also interest to think about. While interest is front loaded, so you may more interest at the beginning than principal, that interest is calculated over the term. The longer the term, the more interest you’ll pay.


You could effectively pay twice as much in interest for a 72 month loan than a 36 month auto loan.


The downside of a shorter auto loan is either higher monthly payments or borrowing less. Much depends on your situation and what you can afford.


The pros of longer auto loans in Halton Hills


There is are definite benefits of longer auto loans too. You can borrow more for a newer or better car or have lower monthly payments.


Borrowing more can mean a better car or a newer one depending on what you’re looking for. As long as you can qualify for the amount of the loan, this opens up a whole new range of options for your car shopping pleasure!


The other benefit is lower monthly payments. If you borrow the same as you were originally planning to, you could end up paying less each month to pay off the loan in full.


Depending on your situation, lower monthly payments can offer a lot of freedom in terms of affordability or flexibility. If you couldn’t otherwise afford the loan, this gives you access to a car you wouldn’t otherwise be able to afford.


If you have a lot of other stuff going on, you have the flexibility of more free cash at the end of the month to cope with it all.


The downside of longer auto loans is paying more in interest. As you pay over the term, the longer the term, the more interest you’ll pay.


You will often find longer auto loans come with lower rates so you’ll have to do the math to work out whether you would be better off with a shorter or a longer auto loan.


Just make sure to fully explore your options before you commit. Most auto loan calculators can help you balance monthly payments, payment terms and interest rates so use them well.


When you’re ready for a car loan, get in touch with the Halton Hills auto loan experts at Northway Ford for great deals on auto finance.

Categories: Car Loan

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