Car Loan Term
Quick Answer
The length of time to repay an auto loan, typically 36 to 84 months.
Definition
The length of time to repay an auto loan, typically 36 to 84 months.
Explanation
Shorter terms (36 months) mean higher payments but less total interest. Longer terms (72-84 months) offer lower monthly payments but cost more in total interest and may leave you upside-down longer.
A 36-month term is ideal financially. 72+ month terms should be approached with caution due to rapid car depreciation.
Example
$30,000 at 6%: 36-month term = $913/month ($2,868 interest). 60-month = $580/month ($4,800 interest). 72-month = $497/month ($5,784 interest).
Frequently Asked Questions
What is Car Loan Term?
The length of time to repay an auto loan, typically 36 to 84 months.
How does Car Loan Term work?
Shorter terms (36 months) mean higher payments but less total interest. Longer terms (72-84 months) offer lower monthly payments but cost more in total interest and may leave you upside-down longer.A 36-month term is ideal financially. 72+ month terms should be approached with caution due to rapid car depreciation.
Can you give an example of Car Loan Term?
$30,000 at 6%: 36-month term = $913/month ($2,868 interest). 60-month = $580/month ($4,800 interest). 72-month = $497/month ($5,784 interest).
Free Excel Templates
Also try our free Mortgage Amortization Schedule template
Create a detailed mortgage amortization schedule. See exactly how much principal and interest you pay each month over the loan term.
Download Mortgage Amortization Schedule