What is actual Reality of Extended Loan Terms and condition?

    Extended loan terms or longer loan terms are attractive because they allow you to buy an expensive car while making smaller payments. But, before you opt for such a loan program, it is important to understand its reality.

It is the situation before the loan upside:
                     Upside down car loan means that you owe more to the lender than the car's actual worth. It is a very dangerous situation because if your car is written-off in an accident, you will still have to pay the loan amount. It means you will have to pay money for a car that you no longer drive.
If you opt for a longer term and smaller monthly payments, you will end up with an upside down car loan. It is because lenders will direct monthly payments towards the interest and will not reduce the principal amount.

Negative situation:
                     A car's depreciation rate is higher in the first few years. And, if you opt for extended loan terms, you will make smaller payments. As a result, the outstanding loan balance will not reduce quickly. It will create a situation of negative equity. Remember that it is harder to trade-in a car with negative equity because it doesn't have the power to reduce the new asset's cost.

Payment mode of the insurance:
                      Suppose your loan amount is $40,000. If the interest rate is 5% and the term is seven years, your total interest amount will be $7489.97.
 Now, let's assume that your loan amount and the interest rate is same as mention. If the loan term is reduced to four years, you will end up paying $19,108.12 in interest. So, it is advisable to opt for a shorter term and save money in the long term.
Now that you have understood the reality of extended loan terms, it is advisable to stay away from it. Remember that it is always the bigger picture that matters.
Get destination regarding car which is the most important thing, here customer get his car after the all process regarding payment, clearance, insurance, registration etc.
In the last you should aware about the whole category of the car situation about loan and insurance installments 60 month or less or more which is decided with you by the companies or bank representative. You should also understand clearly that there will be no hidden charges or other dues which is mentioned in these matters.
                      The conditions and terms basically held by the companies or banks but these terms and conditions selected by the views of the customers and the people after the huge survey so these terms and conditions well be changed and set aside by the competent authorities .