Buying a new car can be a time of great anticipation ... while you are trying to get a car loan. There are so many fees, interest and time to choose the length that you can easily get bored, and decided not to buy the car at all! If you invest a little time to learn the secrets of the car loan you will find not so confusing thing at all. Here are some tips to help you understand the intricacies auto loans in time.
How much can I borrow?
In most cases, a company car loan will allow you to take as much as necessary to finance the cost of vehicles and to cover any fees, credit insurance and comprehensive insurance car.
Most car loan institutions mandate a minimum of $ 10000, which can be rented for various amounts of time. You may or may not be expected to pay a deposit for a loan. Most auto loans are available for new cars purchased privately or for business, while they are younger than 7 years.
Think of interests
There are two main types of interest rates when considering a car loan: fixed interest rate or variable interest rate.
Fixed interest rate means that the rate remains consistent throughout the term of car loans. So if you take a 10% APR you'll know exactly how much money you'll pay for the life of the loan. If you are on a tight budget, then a fixed rate would be the right choice for you, as you can rest easy, knowing how much you pay each month.
Variable interest rate:
The variable rate means that the course may change and vary depending on the market during the term of the loan. Thus, if a loan of more than 10%, the rate may stay the same, increase or decrease, and many times in the life of the loan.
If high interest rates and prices begin to fall, the variable interest rates mean lower payments each month, resulting in accurate savings. However, when the market tanks and interest rates rise, you may be looking to pay much more than expected a month.
Provided against unsecured
There are two main types of car loans you can apply for: secured or unsecured. Each of them has certain advantages and disadvantages, so make sure you read all the information that you know that you are getting in.
These car loans that take into account that as collateral for the loan debt if a default of payments. In this case, your car will be used as collateral.
When you do not pay the loan company has the right to return the car and sell it for a refund loan. Your advantage is that secured loans are often offered at lower interest rates because the risk of bank or institution does not receive your money will be lower than for them to lend money unsecured loans.
Unsecured loan car 1, which does not use the car as collateral. This type of loan is available at a higher interest rate, but if you default on the loan company can not return the car. You may have to take an unsecured loan if you want to buy a car because the car can not be sufficient value as collateral.
If you are not sure what your employment status will be two years on the road, or if you know what you will need an operation next year, the credit insurance can be a good choice for the study of some lenders will offer car loans at a discount rate if You get credit insurance. Loan insurance protects you when you are disabled, or lose their jobs.
Consider the time in the equation
Your car loan will have different options on the length of time to pay the loan back. Usually ranging from 12 months to 5 years (some companies offer of six or more years), time you decide to repay a loan, it is important in many areas.
More than you return the car loan you pay more interest rate during the loan period. More than the amount of time, usually result in lower monthly payments, but generally higher interest rates. Shorter terms mean higher monthly payments, but the amount paid as a percent less.
So "No" to pay for
Banks and lending institutions not only to make money on the interest rate on your auto loan in those days. They add, and some other fees to make sure to continue to pay and pay, even if you want to pay the loan early. When searching for a car loan, make sure you research the following fees and look for a loan that offers low fares as possible.
Some banks and car loan companies charge a visa fee. This includes the study of their work and data processing of your loan. If you find a loan with a low or even better, is not charged applications.
Some banks will charge a small monthly fee for the duration of your loan. Although an additional $ 3 per month or more, not so much, it can certainly add many years. For example, pay $ 3 monthly fee for your car loan for a term of 7 years to add an additional $ 252 in fees.
Cash against electronic payments:
Some banks encourage electronic payment of car loans by issuing a fee if you decide to get a book, rather than cash. In this case, it may be in your best interest to provide up to $ 100 or so fee and go electronic.
Early repayment fee:
Payment of the loan early it would seem that a good idea at first, until you read the fine print and know that you probably paid for it just that. Banks and credit card companies do not want to waste money on the interest you pay them every month and the payment just before it happens. To make sure that they get part of their share they institute taxes to pay car loan early.