"Should I go with a longer car loan term if the interest rate stays the same? "

"I got pre-approved for a $25,000 car loan at a 3.52% interest rate through my credit union. The interest rate will stay the same whether I go for a four-year loan or a five-year loan.

Is there any downside to going with the longer-term loan for the lower monthly payments?


“As long as the interest rate stays the same, the two sole downsides of choosing the longer-term loan are:
  • The roughly $500 difference in interest charges you will incur
  • The greater risk of being upside-down in the last year of the loan (meaning you owe more than the car is worth)
However, this can all be avoided by paying off the loan early if you are lucky enough to have the opportunity to do that.”
Johnny Puckett
Answered on May 11, 2021
Johnny Puckett is a freelance writer and automotive expert. He has contributed content to a number of some of the largest online publications, aftermarket automotive manufacturers’ sites, and automotive informational sites. His experience in the automotive and information fields informs his writing at Jerry. His automotive interests bleed into his free time, where he enjoys modifying his favorite cars and woodworking.

Did this answer help you?

Ask us a question by email and we will respond within a few days.

Have a different question?

You can meet us at our office and discuss the details of your question.