Car Loans Part.3

Long Term Rental:

The leasing allows the borrower to sign a lease with stable monthly payments without an option to purchase the vehicle at the end of the contract. In recent years this type of credit can be offered by banks. LLD can change the car but will not become the owner. This is a simple car rental.

Personal Loan:

Personal loan is the specialty of banks and credit institutions. It is rather for persons wishing to receive an immediate cash reserve, which can quickly become the vehicle owner, or make another use of money lent. It requires little or no personal contribution. The interest rate, duration and amount of stipends are known input. However, this type of auto loan has many disadvantages. First, the credit contract is not related to the purchase of the vehicle, so if the car purchase is not made, refunds of credit are required. Second, interest rates are excessively high (around 15%). This type of car loan remains a last resort in case of refusal of financial institutions or banks manufacturers.



And the last one often used by car manufacturers. It is to pay low monthly payments for several months and at the end of the credit if the borrower wishes to purchase the vehicle, it pays a higher amount.

* Before getting a Car Loan, consider your budget!

The need for a new car may be acute in many circumstances of life: birth of a child, moving, education, inheritance, changing jobs, etc.. But everyone must remain vigilant in its budget and its operating margins, particularly when the credits begin to accumulate. If you already have a mortgage, consumer credits, but you are thinking of buying a new car, a credit solution is not to give up your projects: the purchase of credit. The purchase of credit will allow you to keep your monthly payments at a reasonable level and keep control of your various loans.

Car Loans Part.2

How to choose car loan?

The acquisition of an automobile represents a considerable investment. For budgetary reasons, it is not always possible for the buyer to pay "cash" and leave with the car of his or her choice. Also, it is sometimes unavoidable and often relevant to carry out a car loan. Today the majority of vehicles purchases in the world are also financed through a vehicle loan. Like the mortgage, there are many forms according to the use made of the vehicle and the objective of the borrower. The borrower's interest is carefully consider while selecting the types of car loans and compare them to make the right choices according to their budget. There are 6 main types of car loan:

 The appropriation:

This is the classic car loan monthly payments that you can subscribe on-site sales. This credit is automatically canceled if the purchase does not occur. In case of dispute on the vehicle purchased, refunds of credit will be suspended. The overall effective rate (interest expense) of this appropriation is less than that of a personal loan. The term of the financing (12 to 60 months) is chosen by the borrower according to his budget. The appropriation is for the buyer who takes out a classic car loan with a maximum of security against repayment of credit. Note that it is for individuals and professionals alike.

 Exchange offer:

It combines classic credit Car loans and bridge loans. The bridge loan provides a "transition" between buying a new car and selling the old one. The sale reimburses the bridge loan and a portion of the purchase of the new car.

 Lease purchase option:

Credit Hire with Option to Purchase is distributed primarily by financial companies of auto manufacturers and some specialized agencies. Its principle is: the borrower leases a vehicle over a period defined by the contract, setting a monthly "rent". He holds the same time an option to purchase the vehicle at the end of the lease period at an acquisition price agreed when signing the contract. Only a guarantee deposit is required at the start of the loan representing between 0 and 15% of the value of the vehicle. The interest rate does not come into play in the lease-purchase. For professionals, this type of loan is called upon leasing.

Car Loans Part.1

The car loan is also known as vehicle loan. It is defined as a loan of money on certain condition, granted by a credit institution or a bank to buy a new car or used by the borrower. The credit is a financing solution designed for consumer goods.    Now days, the acquisition of a car is almost essential for the majority of the population, because of economic, geographic, but also for comfort and freedom offered by a car.

First, moving from home to workplace tends to lengthen. The car is often the only or the best mode of transportation available to active living far from the workplace, whether frontier workers, employees in industrial areas or employees downtown. In addition, many professions require almost constant use of the automobile sales reps, employees of various services etc...


Secondly, the possession of one or more automobiles in a household is even more crucial that the today’s population is increasingly being installed in the periphery or in the extension areas. However, in the absence of public transport in areas that are under-served, rural populations and urban cannot cope without a car for most of their trips: grocery shopping, driving children to school, leisure, weekends, transport equipment, etc... For the Upper class, the car is the mode of family transportation by excellence.

Finally, owning a car is also about fun, comfort, independence and speed. Freedom of movement in time and route that the car gives is unparalleled. In continuation let us see how to choose a Car loan in the next post.