Loan Length Does Make a Difference

The length of a loan makes a difference, even though a lot of people really don’t think that it does. One of the most important differences you’ll see based on the length of your loan is your interest rate. When you opt for a shorter loan you can get a better interest rate because the lender isn’t taking a risk with you for as long of a period of time.
876254 side view mirror Loan Length Does Make a Difference
Instead, the bank or other lending institution knows that they’ll get their money back faster and in bigger payments. It’s important to them to get that money so that they can lend it to someone else and make even more profit from charging interest to that person. Any way that you help them do that will be rewarded.

Where you get your loan from can have something to do with the length of it, as well. Banks and credit unions typically have the most structured guidelines, but they also have the lowest rates. They are often the best places to get a car loan from if you have good credit.

If you want to get more flexible payment options, though, including how long your loan is for, you might need to finance through the dealer. You’ll probably pay a higher rate, but you’ll also have more choices and sometimes you can pay by the week, defer payments, or lengthen your loan term if you get into trouble. It’s a great way for people with less than perfect credit to get a car.

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