Purchasing a car can have a major impact on your credit score and monthly budget. When you begin the car-buying process, it’s important for you to know how your auto financing or loan can affect your finances. In a nutshell, the length of the loan term has a significant relationship to your monthly car payment and interest cost.
There are plenty of online tools and calculators available to help you determine how much the length of your auto loan or vehicle financing can affect your monthly car payment. While financing your car over a longer period of time may result in a lower monthly payment that’s more appealing to your budget, it may also result in you paying more interest over time. If your goal is to pay off your vehicle quickly, shorter terms resulting in a higher monthly payment and lower interest costs may be a good fit for your situation. If you are focused on having a lower monthly payment, you may want a longer term. While this may increase your interest cost, you will have a monthly payment that meets your needs. Ultimately, you want to select the option that works best for you and your budget.
If you are someone with bad credit or no credit who is currently in the market to purchase a car and need to get approved for financing, a dealer enrolled in the Credit Acceptance auto finance program can help you get started on your credit approval today!