How long can you get a car loan for?

With numerous auto lenders on the market, getting auto financing has become easier. How long to get a car loan is however something you should consider very carefully as it can affect your credit and monthly finances.

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Written by: Piggyy

A car loan term can be 36 months and it can also be as long as 72 or 84 months. The average loan term for car loans today is about 60 months. You can choose to get a loan for the short term or long term. Both long and short-term loans have their advantages and disadvantages and there are several factors to consider before making your decision.


Short-term loans


Short-term loans are less risky for lenders so they often come which lower interest rates. A typical short-term loan is usually for about 36 months. If you are sure of a solid and stable source of income for the next three years, a short-term car loan will save you a lot of money. You also get to pay off your loan faster. This is especially great if you want to resell your car, considering how quickly cars depreciate.


While short-term loans are less expensive in the long run, the high monthly payments can eat into your monthly budget. Paying such high amounts monthly may leave you with fewer funds to settle emergencies or other financial needs. If you cannot bank on the stability of your job or if you do not have an alternative plan to settle financial emergencies that may occur, a short-term loan may not be the best option for you. 


Long-term Loans


With a long-term loan, you can spread your repayment over a longer duration, allowing you to make fewer monthly payments. A long-term loan is less demanding on your budget and gives you more funds to handle other financial needs and pay down on other debts if you have any. If you’ll love to save more or simply enjoy life, a long-term car loan is a great option.


While paying lesser amounts over a longer time sounds convenient, it means you will be paying more in interest which makes your loan ultimately more expensive in the long run. Lenders consider long-term loans riskier and compensate for that risk by charging higher interest rates.


The risk of negative equity is another thing to keep in mind when considering a longer loan term. This is also called being “upside-down” and it refers to when you owe more on your current auto loan than your vehicle is worth. With a longer loan term, it is possible to still be making payments on a vehicle that has fallen significantly in value. Keep in mind that the average life of a car is about 7 years so a loan of 4 years or more will affect your ability to resell the car. 




Both short and long-term car loans have their financial implications. While shorter loan terms are less expensive, a longer loan term makes monthly payments more affordable. If you do not want to take a long term loan but cannot afford a short term loan, there are a few things you could do to lower your monthly payments such as:


  • Leasing
  • Buying a less expensive car
  • Buying a used car
  • Making a larger down payment 




In essence, how long you should get your car loan depends on several factors. Consider your financial standing and also work on improving your credit score, as you can negotiate for better interest rates and more favorable terms with good credit. Getting a car is great, but it is also important that you can conveniently make payments.


״The secret of happiness, is not found in seeking more, but in developing the capacity to enjoy less״ - Socrates

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