Are you thinking of buying a car? Do you calculate how much money you can spend on this? Do you want to direct your steps to the nearest bank branch? This is probably not the best idea. Find out first what you should pay attention to when choosing a car loan and what the current offers of banks in this matter are.
Currently, there are several institutions on our market-focused mainly on car loans, the so-called motobanks and a group of banks which offer such offer for their clients. The problem begins when we have to choose one of them.
For the New Year – a new car
First of all, an important issue is a fact that at the beginning of the New Year there is a real rash of car loan promotions. For example, E-Money Bank offers a promotional loan for all car brands, new and used – nominal interest rates from 3.99% (12 months) to 8.99% (up to 96 months of the loan period).
In turn, E-cash Bank offers a loan with a commission lower by up to 50% (for people who have or will set up an account at E-cash Bank) and containing a rebate discount on the purchase of fuel by 5% for 3 years (an additional credit card can be issued for the loan). At Good Finance Consumer Bank, the current promotion is a 50% discount on the first 4 installments.
New or used?
This crucial question always appears right after you decide to buy a new car with a loan. First of all, you should consider all the pros and cons. A loan for used cars is usually a higher interest rate (it depends, among others, on the age of the vehicle and the loan period). So although we will need a smaller amount of credit, it can be quite expensive for us.
The situation is different with a new car loan. The interest rate is then much lower, even by several percents compared to used cars. The cost of credit also decreases when we take out a loan for a short period of time (12-24 months). Here the difference also reaches several percents.
What do I need to take a loan?
Usually, a certificate from the company about the amount of income is required, unless we have our own contribution and if it is above e.g. 30% of the loan value then it is possible to use the so-called a simplified procedure and all you need to do is present a statement of income (this solution can be used, among others, at Good Credit Bank and Good Finance Consumer Bank ).
The bank may additionally require a write-off on the absence of a pledge (in the pledge register) on the vehicle being purchased, as well as Pro-forma invoices – this is the case for used cars bought from a commission or dealer.
When it comes to the type of car loan collateral, the most common are: registered pledge on the car you buy, car transfer to the bank, assignment of the car insurance policy to the bank or vehicle card deposit.
When you make the final decision on the choice of the offer, regardless of whether it will be a car loan (see the current comparison!) Or a bank loan, be sure to look at any additional conditions that are set. This is a very important issue because it often turns out that the loan is, for example, a much higher interest rate, when it exceeds a given limit or is directed only to a given type of vehicle.
It is also worth considering loan insurance, e.g. against job loss. Find out also what is the required amount of own deposit – in some offers it can be even 50% of the vehicle value. You should also think carefully about paying off part or all of the loan before the end of the loan period without interest.
You never know if circumstances will not allow that in the near future. Look also at the methods of collateral used by banks: it is often the case that they require a registered pledge or transfer of ownership in the event of e.g. theft of a car. Thus, the bank becomes a co-owner of the car until the loan is repaid.