Auto Loan Terms at a Glance
If you’re buying or refinancing a car in Texas, your loan term (the number of months you take to repay) directly affects your monthly payment, interest rate, and total cost. Shorter terms usually come with higher payments but lower overall interest, while longer terms lower your payment but increase how much you pay in interest over time. At Credit Union of Texas (CUTX), you’ll see common terms from 24 to 84 months, and in many cases, your term can be customized around your budget, vehicle, and goals.
CUTX uses simple interest and does not charge prepayment penalties, so you can choose a term that gives you breathing room and still pay extra toward principal when it makes sense. You can also refinance your existing auto loan to shorten or extend your term as your situation changes.
How Auto Loan Terms Work at CUTX
When you finance a vehicle, “term” is simply the length of time you agree to take to repay your loan. But the details, like which term you qualify for and how flexible it can be, matter a lot when you’re trying to line up your car payment with the rest of your budget.
Common Term Lengths from 24 to 84 Months
CUTX offers the most common auto loan terms that many Texas borrowers expect to see, and we can customize the term to fit your needs. For example, if you’d like a 62-month term to match your previous payoff timeline or to fit within a specific budget, we can usually accommodate that.
As of 2025, 72 months is the most common term among our members. It offers a balance between an affordable monthly payment and a competitive rate. With vehicle prices continuing to rise, this term helps members keep payments within their target range.
Key insight: Many members choose 72 months because it’s a middle ground. It's more affordable than a short term, but not as extended as the longest options.
Custom Terms to Match Your Payoff Timeline
You’re not limited to the standard 24-, 36-, 48-, 60-, 72-, or 84-month options.
Yes, we can structure custom terms to fit your situation. You’re not limited to standard increments; our team can adjust the term to align with your financial goals or remaining loan duration.
That might mean matching the payoff date on a previous car loan you were comfortable with, lining up your car payoff with when you expect another major bill to drop off, or adjusting a few months shorter or longer so the payment fits your monthly budget.
Simple Interest and No Prepayment Penalties
CUTX uses simple interest on its auto loans, which affects how interest accrues and how extra payments work.
Your APR reflects both your interest rate and any applicable finance charges. It shows the total cost of borrowing expressed as a yearly rate. At CUTX we use simple interest, meaning interest accrues daily based on your outstanding balance and there are no prepayment penalties if you pay your loan off early.
This structure gives you flexibility: interest is based on your remaining balance, paying extra toward principal helps reduce total interest, and you can pay off your loan early without worrying about a fee.
How Loan Length Changes Your Rate, Monthly Payment, and Total Interest
Your loan term and your interest rate work together to determine what you pay each month and how much you pay over the life of the loan.
Why Shorter Terms Typically Have Lower Rates and higher payments
Generally, shorter loan terms have lower interest rates because the risk to the lender is lower and the loan is repaid more quickly.
Shorter loan terms typically come with higher monthly payments since the amount financed is spread over a shorter period. Credit may play a role if a member’s debt-to-income (DTI) ratio is high, meaning they already have several obligations, and a higher car payment could impact that ratio.
Why Longer Terms Often Cost More Over Time
Longer terms tend to carry slightly higher rates since the vehicle’s value decreases over time. However, our rates remain competitive across all term lengths.
Longer terms generally mean more interest accrues over time. That’s because you’re paying interest for more months and the balance declines more slowly.
Key insight: Eligibility for certain term lengths often depends more on the age and mileage of the vehicle than on credit score alone.
Balancing Monthly Payment Comfort and Overall Cost
When you choose a term, you’re trading off between monthly payment comfort and total interest cost.
Monthly payment comfort: Shorter terms mean higher payments, while longer terms lower the payment.
Total interest cost: The longer the term, the more interest you’ll pay overtime.
Many members choose a longer term for a lower required payment, then make additional payments toward principal when they’re able, to reduce interest and pay off the loan faster.
Loan Terms for New Cars, Used Cars, and Refinancing
New and used vehicles don’t always qualify for the exact same terms. Vehicle age, mileage, and condition all play a part, and similar rules apply when you refinance.
How Vehicle Age and Mileage Affect Available Terms
Depending on the age and the mileage on the used vehicle, it could carry different loan terms. Most lenders offer completely different programs.
The maximum term depends on the vehicle’s model year, mileage, and overall condition. In most cases, we can finance used vehicles for up to 84 months, but older vehicles may only qualify for shorter terms.
Maximum Terms and Typical Cutoffs (Age, Mileage, 84 Months)
In practice, many used vehicles can be financed for up to 84 months, depending on model year and miles, while older or higher-mileage vehicles are more likely to be limited to shorter terms. While there’s no single cutoff, vehicles more than 9 years old or over 100,000 miles often qualify for shorter terms. However, we review each loan individually and can often find options that fit your needs.
Your loan officer will look at your vehicle’s specifics. walk you through what’s available, and help determine the best term based on your specific vehicle.
How Refinance Terms Compare to Purchase Terms
Refinance terms generally follow the same vehicle age and mileage guidelines as purchase loans.
Refinancing and Adjusting Your Auto Loan Term Over Time
Your initial car loan for a vehicle doesn’t have to be the one you stick with. Refinancing can let you change your term, adjust your payment, and potentially reduce your interest costs.
Loan Term Options When You Refinance an Existing Auto Loan
When you refinance your existing auto loan with CUTX, refinance terms follow the same age and mileage guidelines as purchase loans.
Your term can be adjusted based on your goals. We can match your current term, extend it to help lower your payment, or shorten it to help you pay off your loan faster. Sharing your long-term goals with your loan officer helps us structure a loan that best fits your financial plan.
Even while keeping the same remaining loan length, refinancing can help lower your total interest costs if your new rate is lower than your current one. The process may include minimal fees, such as standard title or processing costs, which can vary by state. We’ll always review any applicable costs with you before finalizing your loan.
Shortening Your Term to Reduce Interest
Members can refinance from a longer loan term down to a shorter term to save on interest. This works because as you pay off your vehicle more quickly, you allow less time for interest to add up.
Extending Your Term to Lower Monthly Payments
In some cases we can refinance the loan internally to assist with extension for monthly payments. Extending your term can lower your monthly payment, but usually increases the total interest you pay.
As long as you understand the tradeoff, extending your term can be a useful way to stabilize your overall financial picture.
Updating Vehicle Protection When You Refinance
When refinancing, you can take advantage of adding optional protections such as Vehicle Service Contracts, GAP coverage, Tire and Wheel Protection, or Payment Protection, even if you didn’t choose them when you first financed your vehicle or if your prior coverage has expired. These options can help reduce unexpected out-of-pocket expenses over time.
In many cases, if you already have these coverages, we can often offer them at a lower cost. You may be able to cancel your existing protection plans, apply any eligible refunds toward your new loan’s principal balance, and reselect similar coverages at reduced pricing, helping you save even more in the long run.
You can learn more about these vehicle protection options as part of the CUTX auto protection program.
Extended Terms Like 84 Months: When They May Make Sense
Longer terms are more common than they used to be, especially as vehicle prices rise.
Rising Vehicle Prices and Payment Affordability
Extended-term loans, such as 84 months, are becoming more common as vehicle prices continue to rise. A longer term can make monthly payments more affordable by spreading the balance over additional months.
At CUTX, 84 months can be recommended for certain situations or member structures where a lower monthly payment supports overall financial stability. However, because more interest accrues over a longer term, it’s important to consider your long-term cost and budget goals.
CUTX does not currently offer 96-month financing, but your loan officer can help you explore the best structure based on your credit, vehicle, and payment preferences.
The Tradeoff: Lower Monthly Payment vs. More Interest
With any extended term, there are clear tradeoffs:
- Lower monthly payment and potential support for your overall financial stability.
- More interest accruing over time and the possibility of owing more than the car is worth for longer.
If you need an 84-month term to make the payment work, talk with a loan officer about a plan for extra payments when possible so you can balance affordability now with a faster payoff later.
How CUTX Helps You Choose the Right Auto Loan Term
Choosing a term isn’t just about picking a number of months off a chart. CUTX loan officers work with you to line the term up with your budget, your vehicle, and your long-term plans.
How CUTX Compares Term Options Side by Side
We start by looking at your financial goals and monthly budget. Our team can show you several loan term options side by side so you can see how each one affects your monthly payment and total interest cost. We’ll also talk through factors like how long you plan to keep your vehicle and whether you want flexibility to pay extra toward principal. The goal is to find the balance between a comfortable monthly payment and minimizing overall cost.
You can start by learning more about auto loans at CUTX, then talk with a loan officer about the specific scenarios that fit your budget.
Key Factors to Consider Before You Choose a Term
Before you pick a term, review these core factors:
- Monthly payment comfort: Shorter terms mean higher payments, while longer terms lower the payment.
- Total interest cost: The longer the term, the more interest you’ll pay overtime.
- Vehicle age and condition: Older age vehicles and higher mileage vehicles may require additional maintenance upkeep and could cause you paying more money out of pocket for repairs.
- Future plans: If you might trade in or sell early, a shorter term can help you build equity faster.
- Financial flexibility: A longer term can free up monthly cash flow for other goals, especially if you plan to make extra payments.
When Leasing Might Be a Better Fit
CUTX does not offer balloon or step-up/step-down payment term structures.
If you prefer to drive newer vehicles more often, expect lower annual mileage, or want a lower payment and are comfortable with lease terms, your loan officer can help you compare a traditional auto loan with available leasing options to see which is a better fit.
Quick FAQs About Auto Loan Terms, Rates, and Refinancing
Do shorter auto loan terms always have lower rates?
Typically yes, but there can be exceptions. Sometimes, special promotions or manufacturer programs may offer the same rate for a variety of terms. Member credit, vehicle age, and loan amount can also influence the rate more than the term itself.
Are there special rate discounts available?
Yes, we offer discounts for our military, educators and first responders. Ask your loan officer how these discounts may apply to your situation.
Are auto loan terms different for new and used vehicles?
They can be, especially based on age and mileage. Depending on the age and the mileage on the used vehicle, it could carry different loan terms, and there are specific programs for different vehicle types.
Are refinance terms different from terms on new purchases?
Not necessarily. Refinance terms generally follow the same age and mileage guidelines as purchase loans. Your term can be adjusted based on your goals — we can match your current term, extend it to help lower your payment, or shorten it to help you pay off your loan faster.
Is there a penalty for paying off my auto loan early?
No. CUTX uses simple interest and does not charge prepayment penalties, so you can pay off your auto loan early or make extra principal payments without a fee.
Next Steps with CUTX: Explore Your Auto Loan Options
How to Choose the Right Term for You
Choosing an auto loan term comes down to understanding how term length affects your rate, payment, and total interest; knowing how your vehicle’s age and mileage affect available terms; and being clear about your budget, plans for the vehicle, and other financial goals.
Start by deciding the monthly payment range you’re comfortable with, how long you expect to keep the vehicle, and whether your priority is a lower payment, less total interest, or a balance of both. Then work with a CUTX loan officer to compare term options side by side.
Explore CUTX Auto Loans and Refinancing
You can explore current CUTX auto loan options and see how they align with your next new or used vehicle. If you already have a loan elsewhere, CUTX auto loan refinancing can help you adjust your term, potentially lower your interest costs, and update your vehicle protection options to better fit how you use your car.
Whether you’re in Dallas–Fort Worth, Northeast Texas, or anywhere in the state, a CUTX loan officer can walk you through your choices so you can pick an auto loan term that supports both your day-to-day budget and your long-term financial plan.