Paying off the loan early: By getting a short-term loan that's no longer than five years, you'll have more financial freedom in the long run.Lower interest: Paying less interest over the life of the loan is why many people choose short-term loans.By making larger payments over a shorter loan term, your credit might improve, and you may be able to refinance to get a better interest rate. Refinancing: One of the best ways to improve your credit score is to make consistent, large payments.
The benefits of this finance period include: Short used car loan terms operate on a time frame that's usually between 12 and 60 months. If you enjoy the idea of making memories with the same car for as long as it serves you, then a long-term loan might be more suitable. Depending on your lifestyle, budget, and spending habits, one term might suit you better than the other.įor example, if you like to drive the latest cars with the latest features, a short-term loan might be ideal. The two types of car loans are short and long term. Long Car Loan TermsĬonsider several factors before financing a used car, including the number of months over which you plan to repay the loan. The only way to know how long you can finance a used car is to read your lender's used car guidelines, or speak to a representative. Similarly, you might not be able to finance a car with 150,000 miles for more than three years. However, lenders and banks typically follow common guidelines, especially as it relates to age and mileage.įor example, you usually can't finance a used car older than 10 years with a five year loan. There's no universal maximum loan term for a used car. Is There a Limit to How Long You Can Finance a Used Car? But as used cars gained popularity, it prompted lenders to began offering loans of 84 months and even longer, to meet consumer demand. Historically, used car loans had 72-month limits. You might find that some lenders cap loan terms at 84 months, while others will give you a loan for up to 96 months. Compare auto loan rates here How Many Years Can You Finance Your Used Car?Įvery lender has different rules around how long you can finance a used car. If you’re wondering how long you can finance a used car, here’s what you need to know. Even with the most generous lenders, there’s usually a maximum loan term you can choose. Lenders typically provide loans that range from 36 to 72 months, but longer and shorter loan terms are available. You pay the money back over a fixed period of time and pay interest on the amount you borrowed. An auto loan allows you to purchase a car without paying the entire cost upfront. If you’re in the market for a used car, you might be thinking about getting a loan.
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