Auto — Debt

: The length of time you have to pay back the loan. While longer terms (e.g., 72 or 84 months) lower your monthly payment, they significantly increase the total interest you pay over time. Strategic Debt Management How Do Car Loans Work? - Bank of America

: The actual amount of money you borrow to buy the car after your down payment. auto debt

: This conservative approach suggests you put 20% down , finance for no more than 3 years , and keep your monthly payment at or below 8% of your gross income . : The length of time you have to pay back the loan

: Some experts, like those at Edmunds , suggest your car payment alone should not exceed 15% of your take-home pay . Key Components of Auto Debt - Bank of America : The actual amount

: The cost of borrowing that money, which is typically calculated daily based on your remaining balance.

Financial experts use different "rules of thumb" to define manageable auto debt: