When it comes to financing a car purchase, there are a few things you should keep in mind. One of these is how often you’ll be hitting the open road for long road trips. If you love taking road trips and plan on doing a lot of them in the coming years, it might make sense to finance your car purchase over a longer period. This will allow you to keep your monthly payments low and still have plenty of money left over for gas, food, and lodging on your trips. Let’s see how you can finance a car over a longer-term and what you need to consider before doing so.
Get A Title Loan For Your Car Purchase
If you’re looking for fast cash and you have a car that’s paid off or nearly paid off, it might be worth considering getting a title loan. You can use your vehicle as collateral for this type of loan. If you live in Arizona and don’t know where to start, you can start by googling “Phoenix, AZ car title loan companies” to find a lender. As long as the car is in good shape and still has plenty of life left, lenders will give you up to $50k on it even if your vehicle’s value is much lower than that. This way, you won’t need to worry about whether or not your car can be financed over an extended term because it’ll already be taken care of.
How Much Money Is The Term Of Your Loan?
The first thing you need to consider when financing a longer-term is what your monthly payment will be. Since you’ll need to make payments for a much longer period, you can’t expect your monthly payment to be as low as it would’ve been if you decided to take out a shorter-term loan. While the term length plays a big role in determining your monthly payment, so does the APR that’s being applied.
Does The Loan’s Annual Percentage Rate Fit Your Budget?
In addition to considering what your monthly payment will be, it’s also important for you to consider whether or not the interest rate you’re being offered is something that fits within your budget. If it doesn’t, then this could hamper your ability to afford to go on road trips and take care of other expenses related to travel. Also, if you have high-interest rates on your car loan, you can expect to pay more in the long run.
Ask About Additional Fees And Rates
Before you agree to take out a longer-term car loan, make sure that you ask about additional fees and rates.
This way, you’ll know exactly what the total cost of borrowing money will be. Whether you end up getting approved for the loan or not, knowing all of the details will allow you to make a more informed decision about whether or not it’s worth going through with this type of financing option.
Longer Loan Terms = Smaller Monthly Payments & Extra Cash
One of the main benefits of financing your car purchase over a longer period is that it will allow you to keep your monthly payments low and leave yourself with more money for road trips. If you finance your purchase over a shorter duration, your monthly payment will be higher. This is because the total amount of money you’re borrowing needs to be paid off faster to accommodate for the shorter tenure. Rather than having high-interest rate loans on each credit card, getting an auto loan instead offers much lower interest rates as well as far fewer fees and costs associated with the transaction. So if you want to keep your monthly payments low and still have plenty of money left over for gas, food, and lodging on your trips, then financing a car purchase over a longer tenure is the best option.
Rates May Be Higher
Although financing a car purchase over a longer period will likely help you save money in the long run, there’s also another downside to consider: interest rates. If you choose to finance your car purchase over a longer-term, rates may be higher than if you were to finance your car purchase over a shorter duration. That means more out-of-pocket costs and potentially less overall savings as well should you decide to shop around with multiple lenders before signing on the dotted line. So while there are benefits to financing a car purchase over an extended period, this option may not be the best solution should you have bad credit or have trouble paying your bills on time.
Being aware of your monthly payment and interest rate before you sign on the dotted line is important because it allows you to avoid taking out a loan that will be too expensive for you. By doing this, you’ll be able to pay back the loan promptly without spending more than what’s affordable. You can ultimately keep yourself from getting stuck in debt while still enjoying the freedom of going on road trips whenever your heart desires.
Amanda Byers is a graduate of Columbia, where she played volleyball and annoyed a lot of professors. Now as Zobuz’s entertainment and Lifestyle Editor, she enjoys writing about delicious BBQ, outrageous style trends and all things Buzz worthy.
