Jalisa should consider various factors before deciding which car loan option to take. Here are the considerations and benefits of each option:
Option 1: 5.5% interest for 5 years
- Lower interest rate compared to option 2, which means she will pay less interest over the loan term.
- Shorter repayment period, leading to quicker ownership of the car.
- Possibility of qualifying for a larger loan amount due to the shorter term and lower overall interest.
Option 2: 2% interest for 10 years
- Lower monthly payments due to the extended loan term.
- More flexibility in the monthly budget as a result of lower payments.
- Could potentially allow for better financial planning or investment opportunities in the short term.
- If Jalisa intends to keep the car for a longer period, a longer loan term may be acceptable.
Ultimately, the decision depends on Jalisa's financial situation, priorities, and long-term plans. If she can afford higher monthly payments and wants to minimize the total interest paid, option 1 would be more beneficial. On the other hand, if she prefers lower monthly payments and has other short-term financial goals, option 2 could be a better choice.
Jalisa went to the bank to take out a car loan. The loan officer suggested ywo options: 5.5% for 5 years or 2% for 10 years . which option should she take. Why?
whats the benefits
1 answer