Lower payment, higher total interest
Extending a car loan can make the monthly payment easier to fit into a budget, but it leaves the balance outstanding longer.
Example: $35,000 financed at 6.9% APR
| Term | Monthly payment | Total interest |
|---|---|---|
| 60 months | $691 | $6,484 |
| 72 months | $595 | $7,843 |
| 84 months | $527 | $9,229 |
Questions to ask
- Can the shorter payment fit without reducing emergency savings?
- How much extra interest does the longer term add?
- How quickly might the vehicle depreciate?