One should not take credit for a car at all, as for all other consumer goods. Taking a loan for dentures, for studying or for a wedding – these are also common reasons for an online loan. Before the credit approval, a bank first checks your identity and creditworthiness. The documents you need for the loan application may vary from bank to bank. However, certain conditions must be met before the loan application can be approved.
Car loan – How to finance your new car
But what if you do not catch the new dream car right away? But what is a car loan? How can I take out a loan to buy a car? In our guide you will find answers to the most frequently asked questions and all the important information about the auto loan business. What is the monthly fee for the car loan?
With a car loan you pay the purchase price of your new car in fixed monthly contributions over an agreed time frame. The monthly rate depends on different criteria. The amount of the deposit: The larger your deposit, the cheaper the monthly fees. Contract duration: A contract period of several months is accompanied by lower monthly contributions. Second
With many providers you can equip not only new vehicles, but also annual cars and used vehicles with a car loan. With a car loan you pay off your desired used or new vehicle with monthly installments. Balloon financing can be referred to as the last installment of a car loan. The monthly installment payment is made after a voluntary advance payment. At the end of the contract period you pay a high graduation rate.
Monthly balloon financing rates are lower than traditional car loans, but you should not underestimate the high final rates. In order to pay the last installment, you should build up financial reserves in advance. However, the price of this type of financing is usually much higher than the car loan. You pay the last installment and buy the car.
If you can not settle the last installment, you can pay them with follow-up financing.
You return the car to the dealer. Monthly leasing rates are usually lower here than with a car loan. They are also very flexible, because you think about the receipt, the further financing or the return of the vehicle shortly before the end of the contract period.
However, the price you ultimately pay, taking into account all aspects, is usually much larger than a car loan. With these car loans you need to apply a high completion rate. The total prices of a car loan are often lower and therefore usually the cheaper. The disadvantage, however, is that you have less flexibility in car loans.
If you want to take out a loan for your car, there are many contacts with which you are familiar. If you want to find a cheap car loan offer, you should always compare several service providers with different offers on different terms. Homebuilders are often the first port of call when it comes to finding cheap car loans.
In particular, if you have been a client or customer of a bank for a long time, you can generally expect that you can negotiate the amount of the loan and the terms individually. Often, these banks are also more responsive when you are unable to pay in installments. In addition, some houses do not carry the registration certificate for your vehicle.
If you can no longer afford the partial payments for your car – eg due to job losses – you can sell the car and pay off the loan with the proceeds. As a rule, car sales are only possible if you also have the vehicle registration and hand it over to the customer.
However, banks generally charge a higher interest rate than direct banks. With the help of questionnaires that you can answer on the Internet, you can quickly see who provides the vehicle loan at the best price. In addition, the interest and loan costs are often more favorable for direct banks than for branch banks. The automobile bank is often a subsidiary of an automobile manufacturer. These include credit card, financial investments and insurance.
In contrast to direct banks and branches, the vehicle bank can offer price reductions for the vehicle in question, as the trade and the bank work hand in hand. However, for safety reasons, the vehicle banks often keep the vehicle registration certificate (Part II registration certificate) of the vehicle. Who keeps the registration document? As already mentioned, many credit institutions hold the motor vehicle title (Part II admission certificate) during the loan period.
If you can no longer pay your installment to repay the loan, car sales would be a way to get your own capital back. According to a survey conducted among twelve credit institutions by the consumer center North Rhine-Westphalia in 2015, three credit institutions did not keep the vehicle registration. In some cases, the borrower only had to send a copy of the purchase contract to the house bank.
One of the banks requested the signature of a so-called “safety transfer” and a copy of the vehicle registration. For the remaining eight institutes, the registration document was kept. Only two of these eight banks were in the event that the vehicle was sold before the end of the term and issued the registration document before repayment of the bond. Is it possible to prematurely pay off a loan for a car?
It often happens that a borrower has surprisingly more resources during the loan term. In most credit institutions, you can wind up the loan for the car in such a case. However, if you so wish, keep in mind that in many cases you will have an indemnity payment called a prepayment penalty.
This is a claim of the principal bank against the borrower. Because of this early repayment, you should carefully consider whether you really want to repay the loan early. Although the car belonged to you for an early date, you have to calculate with increased costs due to the compensation amount added to the loan amount.
When you take out a loan, you are often offered other services that you may not have used. This requires the payment of the monthly installment owed for the loan if the borrower is unable to pay the rate for the auto loan business. In the following insurance cases, the tariffs are taken over by the health insurance, as agreed:
Numerous banks would like to offer these insurances, as they protect the house bank against payment default. On the other hand, contributions to the installment insurance often include higher commissions for the loan broker or lender. So keep in mind that it usually only makes sense to take out these insurance policies if the repayment term is very long and the loan is relatively high.
However, this is often not the case for car financing, especially considering the usually short-term duration of a few years. This would only increase the cost of financing your vehicle and, in most cases, be disproportionate to the insured loss. In addition, the vehicle value is sufficient as a security when buying new cars.
Therefore, you should carefully consider whether you would like to take out a residual debt insurance for your loan. If you are looking for a cheap and well-equipped car loan, you should educate yourself well before buying a car. How long is this possible and what are the monthly installments? Here the special loan calculators help you to the car.
But not only the sum of the monthly installments – you always calculate the total purchase price, taking into account the duration, the down payments, the purchase price, etc. For example, it may pay off for a larger amount, but if the seller then more favorable conditions for the loan Has.
To what extent is the loan valid? Is it possible to repay the loan early without requiring early repayment? Conclusion – For whom is a car loan worthwhile? Because of the current low interest rates, car loans are usually the cheapest option if you want to buy your new vehicle. So you can take out a loan for both a new and a used car and thus avoid the pressure to completely dissolve the desired vehicle.
Usually, the monthly fee is much more expensive than the balloon and three-way financing, but the high completion rate does not have to be paid. With a car loan, you know very well that you paid for the car by paying the last monthly installment and then you own the car. However, you only pay to use the car here.
After expiry of the contract, you must return the vehicle. On the one hand, a self-employed car loan is usually very difficult to obtain and is subject to strict conditions.