A car has become indispensable for most people, but it remains an expensive purchase. Searching for the cheapest car loan can ensure that the price falls significantly.
Our tips in this article will hopefully help you to find a cheap car loan.
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There are many differences between car loans. For example, there are different formulas that apply to second-hand cars or to the purchase of a new car. In addition, there are also numerous financing options, but the manufacturers also offer loans so that you can buy your car at a so-called interest rate of 0%. Although 0% seems attractive, you have to look for snakes in the grass.
The car show in January is the perfect time to buy a new car at attractive prices. Not only do providers keep a lot of actions, but banks also take part in this trend. Always ask your own bank and see if special promotions are being held there. If not, you can still compare car loans via our website. your vehicle will serve as collateral.
A car loan will usually come in the form of a personal loan (= installment loan). Both interest, maturity and loan amount are fixed in advance. Legally an installment loan has to be repaid up to 2,500 euros within 24 months, the car will often be used as collateral.
Paying an advance yourself is not mandatory! However, if you want to pay in advance, you can safely request a discount from the bank.
Sale on payment.
In the case of a sale on installment, the car will serve as collateral. The advantage of this is that this form of financing is cheaper than a personal loan because there is less risk for the financial institution. An advance will have to be paid, for example, 15% of the financing amount.
Somewhat less known is the ballooning credit or the loan with residual value. In doing so, you will make small interim payments but have to repay the remaining balance at the end of the contract. This can be between 25% and 50% of the total loan amount. Pay attention to this, a classic car loan is usually much cheaper!
The 0% credit.
The car manufacturers can also provide loans that are usually at 0%. Interesting? That depends on the total cost! It is possible that you lose certain other discounts or that the purchase price for your old car becomes less interesting. Always request a simulation with credit at 0% and without.
Tips to find a cheap car loan
Negotiate first about the purchase price of the car itself! See which discounts you can get and which acquisition premiums different sellers can offer. Also, check the conditions if they provide credit to 0% and find the snakes in the grass. Then go along with one or more banks to compare loans. A credit of 0% given by the provider may not be the most interesting option if you count everything together.
Sometimes it may be more advantageous to borrow just a bit more or to keep the period slightly shorter. A loan is calculated on the term, but also on the amount. By making some minor adjustments, the APR (Annual Cost Percentage) looks completely different.
Compare car loans with different providers. Each institution uses different rates and formulas, which means that there may soon be differences in the total cost price.
Consider a large advance. Savings money does not increase that much, which makes it more interesting to pay a large advance and thus save interest on the loan.
New car or used car? With new cars, you can borrow up to 110% of the purchase price in most cases. In this way, you can use your loan to also pay the entry tax and your first insurance premium. Also, interest rates will usually be lower when it comes to buying a new car.
Also, negotiate file costs. Many people forget this, but here too there is a saving. Interest rates can be low, but if you pay towering file costs, low-interest rates are of little use.