3 Reasons To Opt For A Short-Term Car Loan

Posted on: 11 May 2016

Have you decided to get financed for a new car and have no clue if you should opt for a short or long-term payment plan? It is wise for you to opt for getting financed for a short-term loan, as it can offer more benefits than one that you can take longer to pay off. Take a look at the information in this article to find out why getting a short-term car loan is in your best interest.

1. Your Interest Rate Will Be Lower

You will end up paying a high interest rate if you opt for a long-term loan. The bad thing about a high interest rate is that it leads to you spending more money on a car than it is actually worth. With a short-term loan, you will still pay a little extra for your car after the interest rate is factored into the total. However, the interest rate will be low enough to not make a big difference in the overall cost of the car. It is wise for you to shop around at several dealerships before getting financed, as some of them can offer lower interest rates than others.

2. Pay Off Your Car in a Timely Manner

When you opt for a short-term loan, you will end up having to pay more money per payment. However, the great thing about having larger payments is that the car will get paid off a lot faster than if you had a long-term loan with smaller payments. The sooner that you pay the loan off, the sooner you will be able to put more money towards other things in your life. For instance, you can start saving the money for retirement after you are no longer stuck with making car payments.

3. The Resale Value Will Be Satisfactory

You can't predict if you will want to sell your car for a different model after the loan is paid off. By opting for a short-term loan, your car will not have depreciated in value as much after you become the owner. You will be able to resell the car at a decent depreciation price by opting for a short-term loan, especially if the car is resold shortly after you have officially become the owner.

Start browsing a few dealerships and car financing services so you can find a car that meets your needs and get financed for a short-term loan.