60 Month Used Car Loans: 2 Pros and Cons (2024)

FAQs

60 Month Used Car Loans: 2 Pros and Cons? ›

The advantage of longer term loans is that you have longer to pay, and get a lower monthly payment. On the other hand, you may be paying less per month, but you will be paying much more than the original principal when compared to a shorter term loan like a 36 or 48 month loan.

Overall, if you're choosing between the two, a 60-month loan is better because you'll pay off the loan faster with a lower interest rate, and you'd be paying less overall for your car. If you'd like to make more auto loan comparisons, this article on common car loan terms can help.

You'll likely have to pay a higher interest rate.

With many personal loan lenders, the length of your loan is one factor determining the interest rate you're charged to borrow money. A longer term is riskier for the lender because there's more of a chance interest rates will change dramatically during that time.

Is 60 Month Loans legit? Yes, 60 Month Loans is a legitimate lender that specializes in no-credit-check loans for people who have fair or bad credit.

Average Interest Rate on a Car Loan by Length of the Loan:

36 Month – 4.21% 48 Month – 4.31% 60 Month – 4.37% 72 Month – 4.45%

Paying extra toward the principal won't lower your monthly car payment. It may save you money in the long run by shortening the loan.

A 72-month auto loan isn't always the best option. Compared to a 60-month loan, you'll pay interest for another 12 months, which increases the overall cost of borrowing. A 72-month auto loan also puts you more at risk of being upside-down on the loan, which is owing more than your vehicle is worth.

NerdWallet recommends financing new cars for no more than 60 months and used cars for no more than 36 months. These maximums can help you avoid some of the negative outcomes of long-term loans.

What are the pros and cons of cars? ›

Cons: Cars do come with inconveniences, such as maintaining registration and finding a place to park. If you own a car and your friends don't, they might want you to give them rides frequently. Pros: Cars are associated with personal freedom for a reason.

Dealerships often offer longer terms and lower monthly payments. Dealerships can offer personalized deals that you may not get through your banking institution, such as longer loan terms. You can often finance for terms up to 72 months, which means you can negotiate a lower payment that fits your budget.

After you submit your application, we will be performing a set of credit checks to verify your ability to repay the loan. Because of our relationship with Experian, we are able to find out the credit information we need without having to do a hard inquiry on your account.

Ghost loans are the ones that are fake loans documented in the loan books and exist only on paper. The challenges of ghost loans can crash an individual's credit report and erupt into the public domain when people realise that their credit scores have dropped.

There are several ways to check if a loan company is legitimate. First, check out the loan company on the Better Business Bureau (BBB) website. Do a quick online search and look up online reviews from independent companies like Trustpilot, if possible.

Lenders usually charge higher interest rates for long-term auto loans. Because there's more time for a borrower to default on the loan, lenders consider longer-term loans to be a higher risk. To compensate for that risk, they often charge a higher interest rate when you stretch out the loan term.

NerdWallet typically recommends keeping auto loans to no more than 60 months for new cars and 36 months for used cars — although that can be a challenge for some people in today's market with high car prices. Ultimately, choosing the best auto loan term depends on balancing cost, affordability and your specific needs.

While there are a couple of advantages to a longer term car lease, it's not always a good idea. In fact, the potential dangers usually outweigh the advantages that using a longer car lease may offer. If you choose to lease a vehicle for longer period of time, be aware that getting out of the lease may be difficult.

You might find that some lenders cap loan terms at 84 months, while others will give you a loan for up to 96 months. Historically, used car loans had 72-month limits. But as used cars gained popularity, it prompted lenders to began offering loans of 84 months and even longer, to meet consumer demand.