The car loan allows the purchase of a new or used car. The car loan is offered by many organizations such as banks or dealers. Find out everything you need to know to easily get a car loan.
What are the different types of car loan?
A car loan can take several forms:
Consumer credit remains the most common loan. The contract clearly states what the loaned money will be used for. The beneficiary of the consumer credit must therefore be able to provide supporting documents. This is the most easily granted credit. It also benefits from a better rate than the traditional personal loan. In the event of a problem with the delivery of the vehicle (defective model for example), the credit can be cancelled. consumer credit cannot exceed the sum of 75,000 euros, even if the coveted car at a higher price. The repayment period also turns out to be limited. It cannot go beyond 7 years.
The personal loan
This credit is flexible in the use of funds. The borrower can use the money as he sees fit. The loan can be used, for example, to buy a car, but also to repay debts. In all cases, the personal loan must be repaid. And this, even if you decide not to buy a car anymore. It is a less protective loan than consumer credit.
Car dealership credit
Some car brands offer their own zero-rate credit or payment facilities. This takes the form of an interest-free loan. In addition to the monthly payments, there are administrative costs and insurance costs. Although advantageous, this credit makes the borrower « captive » insofar as he must remain loyal to a car brand. Note, some dealerships offer car rental with option to purchase (LOA). Before opting for this alternative, do some research. There LOA formula requires the subscription of insurance as well as a maintenance service. This increases the bill considerably. It should also be noted that buying a vehicle in the traditional way will be less expensive than renting a car over a long period.
The best time to get a good car loan
To be sure of having a cheap car loan, you must be up to date with your credits. Banks determine the auto loan rate based on the level of risk for each borrower. The debt ratio is analyzed. If you already have outstanding loans, it will be difficult for you to obtain a low-cost loan.
When you apply for a loan, it is imperative to be up to date with your monthly payments. Your advisor will automatically carry out a verification.
To assist you in your efforts, you can contact a broker specializing in car loans. This professional will compare and negotiate the best car loan for you. In any case, it is important to play the competition before taking out a loan in an establishment. To compare the different car loan offers, it is possible to make simulations on specialized sites. Some even offer detailed quotes. This will serve as a basis before canvassing the banks.
Read also: Car credit: what is the profile of the typical borrower?