It’s hard to imagine our everyday life without a car. We go to work, shopping or family trips. Of course, each of us wants our car to be as good as it is possible, and to have as much “bajery” as possible. Unfortunately, top-class cars cost a lot and we simply can not afford to buy them. Fortunately, we have one alternative that allows us to buy a good car brand without having to save a lot. The alternative is a car loan.
Car loans are so-called purpose loans that are awarded to finance a specific purpose. This is definitely a better credit than a cash loan, because first, we can get more money in that case, secondly we can spread the repayment for a longer period, and thirdly, it is a much cheaper loan. And all because the bank has very good security, in the form of a credited car. Hardly anyone would like to lose their dream vehicle, so the vast majority of car loan holders pay their liabilities on time.
Virtually every bank offers car loans. Their offers are different and it’s hard to see at first glance which offer is the best for us. So what should we look for when looking for the best offer for us? First of all, we should check the cost of the loan. And several factors affect it. One of them is the age of the car. Generally speaking, the older the car, the loan interest rate will be higher. Another factor related to the cost of car loans is the time we borrow money. The longer it is, the more we will pay for the loan. This means that usually the best interest on the loan will have those who buy a new car straight from the living room, and pay off the debt for 2-3 years. But not only these two factors affect the cost of the loan. For sure if we take out a loan and we do not have any funds to cover part of the purchase costs, we will have to pay more for the loan. In addition, certainly those who take out a car loan in the bank in which they have an account will have lower credit costs. Banks usually take care of their regular customers and offer them slightly better conditions for their products. You can also “win” a smaller commission, because it is usually associated with a car loan. The cost of the loan may also be affected by its security. Usually, there are three types of collateral in banks: registered pledge, ownership transfer and vehicle card deposit. The best for the bank is of course pledge, so those borrowers who decide on this type of collateral can count on a lower interest rate.
When choosing the best offer when it comes to a car loan, it is also worth considering the repayment system offered to us by the bank. We can choose a standard repayment system, i.e. decreasing installments or equal installments. If we decide on such installments, we will pay off similar installments throughout the repayment period, so we can safely plan our expenses. Another increasingly popular repayment system are the so-called balloon installments. When we decide on such a repayment system, at the beginning we will pay off the low installments, and after a certain period of time we repay the remaining amount once. This is a beneficial system for those who often change cars, because usually selling a car, we are able to pay off the last high installment.
If we want to become the owner of the dream car, and we do not have enough money for it, it may be worth considering taking out a car loan. It is not expensive as it is easy to get. But of course, we only apply if we are sure that we will be able to pay our debts in a timely manner and we will not ruin our household budget.