Should I do 48 or 60 month car loan?

(1) You will generally pay less interest on a 36 or 48 month loan than you would on a 60 (assuming that we are not talking about 0% interest deals here). So, while your payments will be higher the shorter the term, your total interest paid will be lower.
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Is it smart to finance a car for 60 months?

The biggest advantage of 60-month car loans is that you have five years to pay them off. Because of this, your monthly payments will be much lower than if you have a three or four year loan. More time equals more time to pay.
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Should I do a 48 month car loan?

A 48-month loan is the optimal car loan length as recommended by personal finance experts. The reason that it's so popular is that it has a great balance between monthly payments and interest paid over the life of the loan.
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What is the best length for a car loan?

According to most personal finance experts, the optimal length for a car loan is 48 months, although some are upping this length to 60 months due to the increased cost of vehicles and lower interest rates.
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What is the advantage of paying off a car in 48 months rather than 60 months?

It helps to pay down the loan debt faster than the vehicle is depreciating—this can help you get more back for the vehicle should you choose to sell it. Shorter-term loans help you free up your money faster. This can help you to pay off an expensive item and enjoy it before it wears out.
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Financing a vehicle? My thoughts on a 60 month vehicle loan.



Is it smart to pay off car loan early?

Paying off a car loan early can save you money — provided there aren't added fees and you don't have other debt. Even a few extra payments can go a long way to reducing your costs. Keep your financial situation, monthly goals and the cost of the debt in mind and do your research to determine the best strategy for you.
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Is it better to get a longer or shorter loan?

Typically, long-term loans are considered more desirable than short-term loans: You'll get a larger loan amount, a lower interest rate, and more time to pay off your loan than its short-term counterpart.
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What is the monthly payment on a $30 000 car loan?

A $30,000 car, roughly $600 a month.
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What is considered a high car payment?

According to experts, a car payment is too high if the car payment is more than 30% of your total income. Remember, the car payment isn't your only car expense! Make sure to consider fuel and maintenance expenses. Make sure your car payment does not exceed 15%-20% of your total income.
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Is 6 years too long to finance a car?

There's really only one benefit of a long-term auto loan that spans six to seven years or even longer. The longer the car loan, the smaller the monthly payment. By taking out financing with an extended loan term, you can potentially buy a more expensive car and still stay within your monthly budget.
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Is 2.9 APR good for a car?

If you're buying a new car at an interest rate of 2.9% APR, you may be getting a bad deal. However, whether or not this is the best rate possible will depend on factors like market conditions, your credit background, and what type of manufacturer car incentives there are at a given point in time on the car you want.
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Is 7 years too long for a car loan?

Stretching your loan term to seven or even 10 years is probably too long for an auto loan because of the interest charges that stack up with a higher interest rate. To illustrate, say you take on a $10,000 car loan for seven years with a 13% interest rate (a common rate for bad credit borrowers).
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Will car loan rates go up in 2022?

The Federal Reserve is reportedly expecting approximately 7 rate increases by the end of 2022, setting up the likelihood of much higher financing rates for both new and used vehicles. The pace at which these increases come may vary, with some coming sooner than others.
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What is the average car payment in 2021?

The average monthly car payment was $644 for a new vehicle and $488 for used vehicles in the U.S. during the fourth quarter of 2021, according to Experian data. The average lease payment was $531 a month in the same period.
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Is $400 a month good for car payment?

The result is that the car will be a lot more expensive in the end. In the example we've given, a car payment of $400 per month for five years (60 months) equates to $24,000. But the same $400 per month spread out over six years (72 months) is $28,800, while it's $33,600 over seven years (84 months).
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Is 900 a month too much for a car?

Experts say your total car expenses, including monthly payments, insurance, gas and maintenance, should be about 20 percent of your take-home monthly pay. For non-math wizards, like me – Let's say your monthly paycheck is $4,000. Then a safe estimate for car expenses is $800 per month.
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Is it smart to do a 72 month car loan?

Because of the high interest rates and risk of going upside down, most experts agree that a 72-month loan isn't an ideal choice. Experts recommend that borrowers take out a shorter loan. And for an optimal interest rate, a loan term fewer than 60 months is a better way to go. You can learn more about car loans here.
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What is the average interest rate on a car loan with a 700 credit score?

Having a 700 credit score puts you in the “prime” category for borrowing. According to Experian, the average rates for this category are 3.51% for new-car loans and 5.38% for used-car loans.
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Why might someone want a shorter auto loan term?

Lower interest rates

Generally, the shorter the loan term, the better interest rates you will get from the lender. Short term loan borrowers are usually rewarded by lenders with a reduced interest rate. This results in an overall lower cost of the vehicle compared to when you're signing up for a long term loan.
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Is a longer loan better?

With a longer period of time to repay your loan, your monthly payments are usually lower than if you borrowed the same amount over a shorter term. But, again, keep in mind that with a long-term loan, you'll likely be paying a greater amount overall because you'll paying interest throughout the longer life of the loan.
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Why are longer term loans better?

Diversifies Capital Portfolio – Long-term financing provides greater flexibility and resources to fund various capital needs, and reduces dependence on any one capital source. It also enables companies to spread out their debt maturities.
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Does paying off a car early hurt your credit?

In some cases, paying off your car loan early can negatively affect your credit score. Paying off your car loan early can hurt your credit because open positive accounts have a greater impact on your credit score than closed accounts—but there are other factors to consider too.
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