Where to start? Your term length is a deciding factor in your interest rate over over the course of your loan. The other three factors being the year of your new car, the amount of money you’ll be borrowing versus the value of your new vehicle, and your credit score and the history behind it. Another article will be covering these factors as they relate to your interest rate, make sure to check in here often to stay at the front of our insights. One question you’ll have to ask yourself at some point in the car buying process, ideally when you’re just beginning, is how long you’d like to have this loan. The typical term lengths that are offered by banks are 48, 60, and 72 months. However, in some cases it may be possible to go as short as 36 months or as long as 84 months. We’ll be looking at the advantages of each usual term length to help you, a potential member of the North End Family, be better prepared for that question; how long would you like your term length to be?
Why choose the 48 month term? For one, it’s going to be a shorter commitment on paper to another monthly bill, appearing to be much less daunting than being committed to financing over a longer term. With the 48 month term you’ll see a lower interest rate when compared to a longer term. For those looking to change vehicles quickly, this option provides you with a shorter initial commitment which ultimately gives you the freedom to finish with your loan quicker and to find your next vehicle.
The 60 month term will provide you with a lower monthly payment than the shorter 48 month term. Also, this term length will provide you with a lower interest rate than financing for 72 months. This then being the middle ground between the 48 and 72 month terms you’ll be able to secure a more manageable monthly bill over the course of your loan then you would with the 48 month term while also not being committed to the higher interest rate attached to the 72 term. When financing for 72 months you’ll find yourself with the lowest monthly payment when compared to the other two usual term lengths. So, 0pting to extend your payments over 72 months will directly translate to the least impactful monthly payment out of the three standard term lengths. And, due to there being no early repayment penalties here in Massachusetts, you have a built in option to save money in the months that you need it by paying the contractual monthly bill while also being able to ultimately finish paying off your loan sooner by putting more against the remaining balance during the months where you’re able to.
Altogether, the 48, 60, and 72 month terms each offer their own unique advantages. Whether you’re looking to save money every month, secure a lower interest rate, or having in a built in option to save in the months you need to while also being able to pay off your loan sooner rather than later, you’ll be able to do so with peace of mind knowing there are no early repayment penalties. Now that you have a better idea of what to expect from each typical term length, what’s next? Feel free to take a look through the remainder of our website, with the built in payment calculator available on each vehicle page you’ll be able to set the term length you’d like and see a potential monthly payment all while comparing our wide selection of vehicles. And, with the ability to send in a full credit application from the comfort of your own home when you find a vehicle that stands out to you, you’ll be able to enter the dealership knowing you have that preapproval from one of the 30 financial institutions we work with. Ultimately, the one thing that’s missing is you, so feel free to reach out to us here for that next step in joining the North End Family.
The article above is a summary of information gathered from research on term lengths as they relate to automotive loans, this information is not meant to replace research undertaken by the consumer but meant to act as a supplement in their search to establish a beneficial financial decision. North End Motors Inc. is not to be held liable for misinterpretation or misattribution of the above article as it relates to the decision to engage in any financial undertaking.