When given the option between a 3-year loan and a 5-year loan, which does Old Doc recommend?

The recommendation for the 5-year loan being favored for lower monthly payments is based on how loans are structured. Generally, a longer-term loan, such as a 5-year loan, spreads the repayment over a greater number of months. This results in lower monthly payment amounts compared to a shorter-term loan, like the 3-year option.

While the total interest paid over the life of the loan may be higher with the longer term, the immediate financial relief of smaller monthly payments can be beneficial, especially for those who may want to maintain a more manageable cash flow or have other financial commitments.

Choosing the 5-year loan allows borrowers to take advantage of lower monthly payments, making it more manageable in the short term despite the potential for a higher total cost over the life of the loan due to interest charges. This could be an especially appealing option for individuals prioritizing their monthly budget or cash flow management.