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Follow on Google News | Understand the Pros & Cons of a Long-Term Auto Loan: Don't Count Your Chickens Before they HatchIt is never a good idea to rush into things, especially when considering a long-term auto loan. Obtaining a long-term auto loan has its own pros and cons. While the pros include reduced monthly payments and the opportunity to repair your damaged...
By: CarDestination.com Pros of a Long-term Auto Loan • Reduced Monthly Payments As compared to a short-term loan, a long-term auto loan has smaller monthly payments. The total amount of the auto loan is spread over a longer time frame, thereby, significantly reducing the monthly payments. Due to a small monthly payment, you can afford to buy an upgraded version of the car as it is less burdensome to repay the loan. • Repair Damaged Credit A long-term auto loan is extended to individuals with bad credit. If you make consistent payments throughout your term, you stand a chance to repair your damaged credit score. Additionally, the likelihood of obtaining refinancing for a long-term auto loan is higher than a short-term auto loan. https://www.cardestination.com/ Cons of a Long-term Auto Loan • High Interest Rates While the monthly payments are low, the interest rates on the long-term auto loans are high. A longer term period means increased number of payments with high interest rates. Therefore, you will not only be paying interest rates for a long time, but it will also be higher than other auto loan options. • Lower Resale Value The depreciating rate of a car ranges between 15% and 20%. By the time you are done repaying a loan, the resale value of your car is likely to drop. As a car is a depreciating asset, the amount you receive after reselling it will be lower than its purchasing price. Therefore, a potential risk of upside down is always associated with a long-term auto loan. So, when does it make Sense to choose a Long-term Auto Loan? If you suffer from bad credit, chances are the dealer will offer you a loan which contains a long-term. Generally, individuals with a damaged credit score can obtain it easily as it requires less credit checks. Also, if you cannot afford expensive monthly payments, a long-term auto loan will help you to afford the car you wish to purchase. A decision taken in a hurry is a decision low on evaluation. A bad credit score may limit your probability of getting an auto loan. However, a long-term auto loan can be a means to reach one step closer to purchasing your dream car. Understand the pros and cons before you decide on choosing a long-term auto loan. Want a long-term auto loan? Or looking for a bad credit auto loan that you can pay off in just a couple of months? https://www.cardestination.com offers multiple auto financing options and enables you to choose the best deal. Get in touch with the bad credit auto loan expert. Ask for zero down payment auto loans and enjoy buying a car without a down payment. End
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