Auto Loan Terms at a Glance
Your auto loan term is the number of months you have to repay your loan. It affects your monthly payment and your total interest cost.
Common CUTX terms: 24 to 84 months (custom month terms may be available).
Interest type: CUTX auto loans use simple interest, and there are no prepayment penalties.
If your needs change: refinancing can adjust your remaining term.
How Auto Loan Terms Work at CUTX
When you finance a vehicle, 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.
Term Options: 24 to 84 Months (Including Custom Month Terms)
Credit Union of Texas offers common auto loan terms from 24 to 84 months. In many cases, we can also approve custom month terms to fit a specific payoff timeline or monthly budget.
Member trend: 72 months is a common choice because it balances payment affordability with a competitive rate.
Custom terms can help you align your payoff date with other goals (for example, matching a previous loan timeline or adjusting a few months to hit a target payment).
Simple Interest, APR, and Paying Early
CUTX auto loans use simple interest, which means interest accrues daily based on your outstanding principal balance.
APR reflects your interest rate plus any applicable finance charges, expressed as a yearly rate.
There are no prepayment penalties, so you can pay extra toward principal or pay off your loan early. Extra principal payments can reduce your total interest because you lower the balance that interest is calculated on.
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.
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.
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 other financial 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.
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.
The maximum term depends on the vehicle’s model year, mileage, and overall condition. In most cases, CUTX can finance used vehicles 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.
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.
Refinancing to Change Your Remaining Term
When you refinance an auto loan with CUTX, available terms generally follow the same vehicle age and mileage guidelines as purchase loans.
You can refinance to:
- Shorten your term to pay off faster and reduce total interest (higher monthly payment).
- Extend your term to lower the required monthly payment (more total interest over time).
- Keep a similar payoff timeline while aiming for a lower rate, depending on eligibility.
Refinancing may include standard title or processing costs that vary by state. We’ll review any applicable costs with you before finalizing your loan.
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
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.
If you need an 84-month term to make the payment work, it’s important to consider your long-term cost and budget goals. Talk with a loan officer about a plan for extra payments when possible so you can balance affordability now with a faster payoff later.
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.
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 over time.
- Vehicle age and condition: Older or higher-mileage vehicles may need more maintenance, which can increase out-of-pocket repair costs.
- 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 vehicle age and mileage guidelines as purchase loans.
Is there a penalty for paying off my auto loan early?
No. CUTX does not charge prepayment penalties.
Next Steps with CUTX: Explore Your Auto Loan Options
How to Choose the Right Term for You
Calculate a monthly payment range you’re comfortable with and decide a maximum payment, and whether your priority is a lower payment, less total interest, or a balance of both. We're happy to help you review your plan at any step along the way.
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.