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How long should I finance?
Compare terms side by side and see which ones match the life of what you are buying.
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Typical useful life used here: about 7 years.
| Term | Monthly payment | Total interest | Interest % of loan | Fit |
|---|---|---|---|---|
| 3 years / 36 months | $7,949.93 | $36,198 | 14.5% | Within useful life |
| 5 years / 60 months | $5,189.59 | $61,375 | 24.6% | Within useful life |
| 7 years / 84 months | $4,022.27 | $87,871 | 35.1% | Longest term within useful life |
| 10 years / 120 months | $3,166.89 | $130,027 | 52.0% | Outlasts the asset |
| 15 years / 180 months | $2,535.67 | $206,420 | 82.6% | Outlasts the asset |
| 25 years / 300 months | $2,097.99 | $379,397 | 151.8% | Outlasts the asset |
Shorter terms cost less interest; longer terms lower the payment and improve coverage. Lenders set the terms they'll offer.
Estimates only. Results vary. No guarantee of approval, rates or savings.
Estimates only. Results vary. No guarantee of approval, rates or savings.
Talk with a financing specialistHow to use this
Start with the longest term that stays within the useful life of the asset, then check whether a shorter term still leaves healthy debt coverage. If it does, the shorter term saves interest.
Read more: How long should you finance a business loan?