"What kind of debt is a car loan considered? "

"I am going through my finances and putting together a list of all of my debt so that I can come up with a plan to get out of debt. My plan so far is to break everything up into sections such as long- and short-term debt and then work on eliminating one thing at a time starting, with the short-term list. Would a car loan be considered short or long term?

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Johnny Puckett
Answered on Jun 09, 2021
“It really depends on how you intend to pay for the loan. If you are making the minimum monthly payment every month for 4-6 years, then it would be long term. However, if you are planning to aggressively pay the car off within a year, then it would be considered short term.
A good rule of thumb is that any debt that would take you longer than one year to pay off should be considered long-term debt.
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