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To make car loans more affordable for the average consumer, lenders have created extended auto loans that can be as long as 84 months. The longer the loan term is, the more your payments are spread out thereby making the monthly payments more affordable.
On the surface, cheap monthly car loan payments seem like a fantastic idea, so what’s the catch? In simple terms, the overall cost at the end of the day is more expensive than it needs to be and you’re essentially putting money into an asset that loses value at a rapid rate. To learn more about the pros and cons of 84 month auto loans as well as alternatives, keep reading.
What happens if your loan is more than your car is worth? Find out here.
More often than not, it is unwise to sign up for an 84 month auto loan. Although, there are instances where an 84 month loan could benefit you. To start, let’s look at the advantages of 84 month auto loans.
Now that we know the benefits that come with a 84 month auto loan, let’s consider the negatives. Below is a list of all the disadvantages that come with 84 month auto loans.
Dealing with an expensive car repair that you can’t afford? Check this out.
Every consumer is unique in terms of their wants, even within the car market. To some consumers, having the newest, sleekest car is a must. Often, for those borrowers, the only affordable way to purchase the car they want is by using an 84 month car loan.
Another reason consumers choose 84 month auto loans is for the general affordability. Borrowers that already have existing debt or can’t afford higher payments with their budget need to turn to 84 month auto loans. Keep in mind that if a consumer chooses an 84 month auto loan for affordability, it is usually out of necessity, not preferability. Many individuals need a car to work and live, and the only way to afford a car may be through an 84 month auto loan.
Not sure how large of a car loan you can afford? This article is for you.
Before making a final decision on a 84 month auto loan, it is wise to consider all the alternatives. When considering your options, be sure to find a balance between the car that you really want and a car that is affordable with your budget.
If you couldn’t resist the glossy car and find yourself stuck in a 84 month loan, don’t panic, there are ways you can get yourself into a better financial situation. First, you should assess the situation and determine if you have negative equity or not. From there, you can use one of the below tactics to get yourself out of the bad loan.
At the end of the day, 84 month auto loans are typically not the best financing choice available. The relatively cheap monthly payments are deceiving since the overall cost will be much more expensive. Not only that, but you don’t want to be stuck in a seven year loan, especially on an asset that is quickly declining in value.
To find an auto loan that suits your budget best and will contribute to a brighter financial future, reach out to Loans Canada today!
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Loans Canada is pleased to announce it placed No. 131 on the 2022 Report on Business ranking of Canada’s Top Growing Companies.
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