For many new car shoppers, financing your purchase can be a confusing and stressful process. With a bit of planning and consideration, though, discovering how you'll pay for your car can be easy. One decision customers will have to make is whether a short-term or long-term loan is best for them. There are advantages to either option, so like many aspects of the car buying process, this is largely a matter of deciding what matters most to you. Read on to learn more about short-term and long-term loans, and be sure to contact us at Hyundai of Evansville with any questions.

Monthly Payments

One of the biggest differences between short-term and long-term loans is that a long-term loan will often lead to lower monthly payments. While higher monthly payments with a short-term loan will usually allow you to become debt-free more quickly, the lower payments associated with a long-term loan mean you can usually buy a more expensive car now and spend a bit longer paying the loan off.

Interest Rates

Another difference between these two types of loans is apparent when we look at interest rates. Usually, short-term loans have lower interest rates. Because of this, short-term loans require you to pay more per month, but less in interest in the long run.