Loan Rate Help

[CleanCredit]

Hi all, I am getting ready to purchase a new vehicle.  The vehicle is about $81K after TTL and I will be putting down about $25K in cash.  I have found a credit union that is offering 2.49% on 72 months (they were offering 1.99% for 72 months until today) or 2.99% for 84 months. 

I'm curious since the interest rates are so close if I should just take the longer term.  I don't have any concern about making my monthly payments and will be paying ahead on it either way, as I'd like to clear the loan in 60 months or less. 

If you guys were in my shoes, which term would you choose? I think I should just take the 72 months but in case of emergency, maybe it would be good to have the lower payment on the 84 months since rates are so similar..

Open to feedback and your thoughts!

[pizzadude]

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@CleanCredit wrote:

Hi all, I am getting ready to purchase a new vehicle.  The vehicle is about $81K after TTL and I will be putting down about $25K in cash.  I have found a credit union that is offering 2.49% on 72 months (they were offering 1.99% for 72 months until today) or 2.99% for 84 months. 

I'm curious since the interest rates are so close if I should just take the longer term.  I don't have any concern about making my monthly payments and will be paying ahead on it either way, as I'd like to clear the loan in 60 months or less. 

If you guys were in my shoes, which term would you choose? I think I should just take the 72 months but in case of emergency, maybe it would be good to have the lower payment on the 84 months since rates are so similar..

Open to feedback and your thoughts!

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$56K  @6yrs, 2.49% is a payment of $838, with $4,345 total interest over life of loan

$56K @7yrs, 2.99% is a payment of $739 with $6,134 total interest over life of loan.

You'll be paying more interest with the higher 2.99% rate, how much more will depend on how quickly you're paying off the loan.

[A-B]

@CleanCredit If you don't mind me asking, what FCU is offering 2.49% for 72 months?

[CleanCredit]

https://www.empower-cu.org/rates/

[Gladius]

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@A-B wrote:

@CleanCredit If you don't mind me asking, what FCU is offering 2.49% for 72 months?

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You have to be a Wisconsin resident.

[RSX]

i would take the longer term and make the extra payments that you had planned  - this way the monthly amount is lower in case of any financial issues

also - if they waive the first month - make the payment anyway - that way you save interest in the long run - plus you are always 1 month ahead on your payments

[A-B]

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@Gladius wrote:

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@A-B wrote:

@CleanCredit If you don't mind me asking, what FCU is offering 2.49% for 72 months?

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You have to be a Wisconsin resident.

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Yes, I noticed that.  Unfortunately, that disqualifies me.

[Kforce]

Some numbers to maybe help

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$56,000 @ 2.49% / payments  $838 (min)   = 72 months and  $4,345

$56,000 @ 2.49% / payments  $900               = 67 months and  $4,022

$56,000 @ 2.49% / payments  $1,000           =  60 months and  $3,591

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$56,000 @ 2.99% / payments $739 (min)  = 84 months and $6,134

$56,000 @ 2.99% / payments $800             = 78 months and $5,615

$56,000 @ 2.99% / payments $900             = 68 months and $4,925

$56,000 @ 2.99% / payments $1,000          = 61 months and $4,389

With $1000 payments the differance is  ~ $800

With  $900  payments the differance is ~  $900

With  $800 payments the differance is ~  $1,300

Safety or money ?

[Mdowning30]

If you're worried about future financial issues or emergencies you should think about getting a cheaper car, you can still get a great new car for half that price and less than that if you're willing to put $25K down, you dont even have to worry about a car payment. Think about it that way. You will save alot in interest or you can choose to have no interest at all !

[FLLGuy]

@CleanCredit  -  What machine are you looking at buying?   Truck, BMW, Benzo...?