While it is now relatively easy to get a car loan, it is still important to compare before starting. Some offers may seem enticing, but adding for example the fees and insurance, the monthly payment is not the same at all. It is therefore strongly advised to prepare your project by choosing the credit best adapted to your own situation.
The duration of the loan
To reduce his monthly payment, one often chooses to extend the duration of a car loan. If this option can be interesting in case of acquisition of a new vehicle, it is advisable to remain vigilant when it is about an old vehicle and in particular kilometer. The risk is indeed to find yourself quickly with a car out of service, while the loan is still not refunded. If your budget also requires you to take out a loan again to change your car, you may have to use a loan consolidation, which will further increase your monthly payment. Some organizations tend to easily lend this kind of loan, so it’s best to think carefully before subscribing.
The type of loan
The assigned loan is the best way to finance a vehicle if you want to own it. Since the credit is linked to the purchase, it can not be used for anything else and the sale is canceled if the creditor refuses. The personal loan makes it possible to obtain sums greater than the value of the purchase. Its obtaining is not conditioned by a precise purchase. Other solutions such as the LOA (lease with option to buy) or the LLD (long-term lease) can finance a car for a monthly payment fixed in advance. If the LOA makes it possible to become owner at the end of the contract – amount defined in advance -, the LLD obliges the restitution. These two formulas have the advantage of being able to circulate with a new or recent vehicle against a predefined rent. It is important to analyze the various offers available on the market and to choose the one that will be best adapted to your situation. For example, for the purchase of an old vehicle, a short-term loan will be more appropriate.
Compare different offers
The auto loan offers are numerous and can hide some unpleasant surprises, although attractive at first sight. Some criteria should be analyzed before going head-on. – The TEG : interest rates being very variable, the TEG will give you an indication of the cost of your financing. – Duration : some credit formulas may offer lower monthly payments, but sometimes with longer duration. – The possible contribution : in some cases, having a contribution can considerably reduce the duration and the amount of the credit. – Fees : they are rarely mentioned in advertising offers and can increase your monthly payment. –Compulsory insurance (or not) : insurance is not always compulsory, but can be useful in case of life incident. Its cost varies from one institution to another. Do not hesitate to compare. – Monthly payment : depending on your situation, your budget, it will be necessary to adjust the monthly payment. Be sure not to exceed the maximum recommended debt ratio of 33% in all credits. A credit, yes, but not at any price. Since credit institutions do not all have the same criteria for over-indebtedness, some lend loans a little easily for issues of numbers. Do not get trapped.