Most vehicle owners use car finance to get to a new or used car in an easy, fast way. If you follow a few tips, you will certainly find a cheap loan that suits your own financial situation.
Possible credit rate determine
First of all, the possible amount of the loan rate should be determined. However, it is also important to include a certain emergency buffer.
In the case of a planned car finance, it is first of all necessary to consider what the monthly installment may be. Accordingly, it is probably best to first list all the income that comes together in a month, as well as all regular and irregular expenses. After that, the expenses are easily deducted from the revenue. From the sum then the rate for the car loan is paid. However, it is best to leave a buffer for emergencies. Afterwards, one can already look for a mobile pedestal, which fits in the determined financial framework. This can of course also be a new car as a used car. If it is a used car, then it should have a certain value for the bank to agree to the financing.
types of financing
In general, the aspiring has borrowers a choice of three different loans: the car, balloon and three-way credit.
For a car loan, the budding borrower usually has a choice between different variants:
This is basically an installment loan ; but with a fixed purpose. The advantage here is that, just because of the Zweckgebundenheit, from the banks usually a favorable interest rate is awarded. The car loan is repaid in constant, monthly installments, so there is a very high planability here. After payment of the last installment, the car becomes the property of the borrower. Therein lies the difference to a classic installment loan: usually gets in a car credit bank the title and the until payment of the final installment of the owner of the car.
This loan type is, so to speak, a mixture of conventional installment loan and leasing. While initially only relatively low rates are paid off, is finally the so-called “balloon” due: the large final payment. However, it may also be the case that a down payment has to be made at the beginning of the loan. In addition, it should be noted that interest on the “balloon” are paid from the beginning. Ideally, the final payment can be financed from its own resources. However, it is usually also possible to take out a follow-up loan; However, the loan can be very costly.
Here usually a deposit is due first. Then, as the name implies, the borrower can choose between three options. For example, it is possible for the dealer to take back the vehicle and the contract is over. However, the wagon must be in a condition that corresponds to its age and / or must not exceed the contracted mileage. Otherwise, the borrower will incur further costs. The second possibility is that the final installment is paid and the car is taken over. As an alternative there is the third “way”: Here it is possible for the borrower to pay the final payment in certain installments.
For most car owners, traditional car loan is usually the best option.
At the end of the financing, the wheeled sub-unit will become the owner’s possession and the installments will be consistently paid in the same amount. In addition, no high final rate must be paid here.
When comparing the loan offers, it is advisable to pay attention to the annual percentage rate, as this includes all credit costs.
In general, of course, the lower the interest rate, the better for the borrower. However, in order to be able to really differentiate the various offers from each other, not the nominalinterest rate, but the
annual interest rates are used for comparison. The difference here is that the last mentioned includes all costs, so that the APR is very well suited for a comparison.
With the help of special repayments, it is not only possible to repay the loan earlier, but it can also save interest.
If they are not already part of the contract, it may be worthwhile to address the bank: Special repayments are a great way to repay the loan sooner and thus save interest. In most cases, many banks will be able to make at least one free special repayment a year.
If nothing has been contractually agreed, it may nevertheless be possible, on request, to make one or more special repayments. However, this is usually a so-called prepayment penalty payable, which require the banks due to lost interest income. Because of this should be well recalculated here, whether a special repayment is still worthwhile.
A rate adjustment, for example, in a sudden, financial emergency, a huge relief. Accordingly, it is worthwhile to address the bank if necessary.
In addition, it is advisable, if the bank does not offer this service itself, to respond to rate adjustments. If such a clause is included in the contract, it is, if necessary, literally possible to adjust the rates. This is useful, for example, when a sudden financial emergency arises, such as a sudden, short-term unemployment or when a new home appliance needs to be purchased.
However, if the bank does not offer rate adjustment, it can often be helpful to just mention it in the loan, but this is possible at Bank XYZ. Of course, this mention should of course also be based on facts. Under certain circumstances, it is quite possible then that the bank will change his mind and still a rate adjustment in the contract with picks.
In general, a dedicated car loan is a good choice. To compare the loan offers, the annual percentage rate is appropriate. Rate adjustments and special repayments provide more flexibility.
First, it is advisable to create a cost / expenditure calculation to determine the possible amount of the loan. In general, a car loan is best suited for a vehicle financing, since this is paid off in constant installments and no high graduation rate is to be paid. Due to the Zweckgebundenheit budding car owners also benefit from a low interest rate.
When comparing the various loan offers, it is important to keep in mind the effective interest rate, as this includes all costs and is thus very well suited for a comparison. Special repayments and rate adjustment are recommended, additional agreements. For example, special repayments make it possible to save interest and repay the loan earlier, while rate adjustments help in financially difficult times.