Car loan – choose the best loan for you!
Are you planning to buy a new car? Are you wondering where to get money for it? With these decisions in mind, banks have introduced a special type of loan to facilitate the purchase of their dream vehicle. Car loan , because we are talking about it, is a wide financing offer that will help you meet this goal. So which one should you choose?
What is a car loan?
A car loan is a type of loan focused on the purchase or financing of a given vehicle. Therefore, the bank does not grant a general loan in the form of money for any purpose – the loan is focused on a specific expenditure. An automotive loan, contrary to appearances, does not have to be focused on buying only cars. Motorcycles, motorhomes, motor boats, caravans and even tractors fall into this category.
Types of car loans
The cheapest car loan is one whose interest rate doesn’t keep us awake at night. There are currently 3 types of car loans:
- standard car loan – monthly repayment of previously specified installments (from six months to even 10 years of repayment)
- one-time car loan – a loan offered by car banks cooperating with a given car distributor. To use it, a down payment is required. Although it seems to be not occasional, it is worth noting that it is not interest-bearing.
- balloon car loan – 80% of installments contain a small amount, only the last installment is the remaining value of the entire loan.
Car loan ranking
To make car loan decisions easier, it’s a good idea to browse the market, considering all competitors’ offers. When deciding on a suitable bank that will offer us such a solution, it is worth considering the interest rate, APRC and of course the installment. Let’s take a look at the five most popular banks that can use a car loan.
For comparison – if we extend the installment period (e.g. 24 months, so twice), the installment in the case of Getin Bank changes to $ 1818. However, if we stay at 12 months, but decide to take a different amount, the installment will increase or decrease. For 30,000, it will be 2,600 USD, and for 50,000 – over 4,300 USD. In this example you can see that each, the slightest change has a real impact on the final receipt of the offer.
It is worth noting here that in the case of full calculation and calculation of installments, the Real Annual Interest Rate should be taken into account, not the interest rate itself.
Currently, companies and websites propose calculators and rankings, which browse and extract offers that meet our needs. The only thing we will need for such a ranking is the amount of loan taken and the number of installments / months to pay it back. That is why it is worth thinking about your own needs and the possibilities of their implementation.
Car loan calculator
Currently, there are free calculators on the market that will help us in choosing the right loan. To view the full offer we will need information such as the amount of the loan, the loan period in months, the price of the car and the age of the target car. Often, calculators ask us about expectations regarding interest rates or the number of installments on an annual basis. For example – by applying for a loan in the amount of $ 60,000, with an interest rate of 7% and a 4-year loan period, each installment will be over $ 1,400, giving more than 8,000 interest in total.
This method of calculation is very helpful and can actually contribute to the selection of the ideal offer. Remember, however, that this is only a hint, not a final decal, which should be interpreted uncritically.