In Vancouver, Canada the term length of your car loan is crucial to think about when you are negotiating with a lender. How long – or short – your loan term is determines three things:
- Most obvious, the actual length of time you will be making payments
- The cost of your monthly payments
- Overall price of the vehicle after interest
Cost of monthly payments
A longer loan term helps spread the cost of the vehicle out, which can greatly reduce your monthly payments. This is useful for borrowers with particularly low amounts of income or a skewed debt-to-income ratio. It allows them to make manageable monthly payments over a longer course of time.
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Overall price of the vehicle after interest
The more time it takes you to pay back your loan, the more interest accrues. This means you will pay more for the vehicle overall. Especially if it is a bad credit car loan, the high interest rate can become costly on a long loan period.
Negotiating the proper term length for your auto loan in Canada involves determining how much you can comfortably afford each month as a payment. By maximizing your agreed monthly payment amount, you can limit the loan period and the final cost after interest. However, it is important to remember not to over extend yourself. Your monthly payments should be reasonable and well within budget. It is best to set the bar low, instead of stressing and barely making each months payment.
We work within your budget to determine the best poor credit car loan available. This includes helping you plan an appropriate loan term that is manageable given any type of financial situation. We specialize in working with borrowers that have poor or damaged credit.
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