The lower monthly payment can cost you more

Stretching a loan over more years shrinks the payment but grows the total interest you pay.

Illustration only — example $20,000 loan at 10% APR (annual percentage rate). Not a quoted rate. $0 $10k $20k $645/mo +$3,232 3 years 36 payments $425/mo +$5,496 5 years 60 payments $332/mo +$7,890 7 years 84 payments
Amount borrowed ($20,000) Total interest you pay
Same loan, three terms. The 7-year option saves about $313/month versus the 3-year, but costs you about $4,658 more in interest over the life of the loan. Compare the total, not just the payment.