CAR LOAN: LONG-TERM OR SHORT-TERM LOAN?
May 25 2023,
When we take out a car loan, we’re often free to choose the loan’s duration, going from 4 to 84 months! Do you often wonder which is the better choice?
The answer: it all depends on your needs! L’Ami Auto Crédit helps you make the best decision.
The Benefits of Short-Term
To finance your car using a short-term loan will be a bit more expensive each month: the car’s price is split in fewer monthly payments. However, a loan with a duration of 36 months or fewer will have other advantages:
• Faster payoff
• Lower interest rates
• Fewer interests paid overall
At the end of the day, shorter loans give you the opportunity to save a bit on your car purchase. If you’re looking for the lowest rates on a car loan, this solution might be the most appropriate for you.
If you have the means to afford bigger instalments, go for a short-term car loan! Besides, your car will get less time to depreciate before it’s fully paid off.
Why Choose a Long-Term Loan
For some people, financing a car over a longer period is the best option. It could be better for you if:
• You have a lower income
• Your income is unpredictable
• You already have multiple loans to pay off
• You want to buy an expensive car
With loans going up to 84 months, the financial burden is lessened each month. If your dream car is more expensive or if you can’t afford higher monthly payments, we’d recommend going for a long-term car loan!
On the other hand, it’s obvious the higher interest rates will make you pay more overall for your new car.
Don’t hesitate and ask any questions you may have to our team in Chicoutimi, La Malbaie, Baie-Comeau, Alma and Sept-Îles. Our professionals are there to help you!
