Car Auto Loan

Deciding how long should your auto car loans should be

Auto car loans have been quite a rage with the car sales going up and newer and newer customer groups joining the bandwagon and the credit institutions doing everything in their book to aid this frenzy. But the car loans come with a lot of caveat i.e. the customer if not well informed can make incorrect decisions and  which can ultimately go on to hurt the customer as well as the credit companies. One such very important decision is the loan tenure or how long the loan should be. There are no straight forward answers to this but the choice depends on a lot of factors.

The type of the car is a major determinant for the tenure of the auto loan. With a new car the tenure can vary from 36 to 48 months. The tenure may also go up to 60 to 72 months for these types of auto car loans. A used car on the other hand does not fetch that high a repayment period as the car value is already low and the expected life is definitely considered low.

The cash position of the customer is also a key factor for choosing how long the auto car loan should be. It is always advisable, if affordable, the customer should go ahead and make a heavy upfront payment so that the burden is minimized and then spread over a decent period of time. This will not only reduce the number of months for which the auto car loan is taken but would also reduce the principal amount on which the interest rate is calculated. But the customer needs to take an informed call on the loan tenure as often due to cash shortage a hefty upfront payment is not affordable and in that case the customer needs to look at the monthly income and outgoings to arrive at a expected amount that he can shell out every month. This would again go on to determine the loan term.

Auto car loans taken by different age group people have different loan tenure. People who are starting their career or have enough number of service left can afford to take a higher number of repayment months whereas borrowers with minimum years of service left will have to choose a lesser number of months in order to pay back their auto car loan.

If a correct decision is not taken on the number of months, it can lead to disastrous results as the customer with a low tenure but low disposable income may not be able to make regular payments and thus default. Whereas a higher number of months for a customer who can afford to pay may higher amount not utilize the resources in the best manner.


Auto car loans have their own repayment period which needs to be decided on very cautiously. How long to take the loan for is a very important decision and depends on various factors like the type of the car. The cash resources of the customer are also important in determining the period of the auto car loan. The age group of the borrower can also go on to add a factor to the repayment period where people at the end of their career will not get higher period whereas young ones enjoy higher periods. Auto car loans normally have 36-48 months of repayment periods.

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