Sunday, April 21, 2019
Lenders

Auto loan: which loan to choose?

Behind auto credit is hiding several types of consumer loans that may be more or less suitable for the project, here is an overview of the loans dedicated to the purchase of a vehicle.

The classic car loan

Auto credit is by definition a consumer loan allocated to a project that is the purchase of the car. Therefore, an assigned loan means that in the event of non-completion of the purchase of the car, the loan is not put in place. This security is ideal for the purchase of a new car or a premium opportunity, that is vehicles with large amounts. The disadvantage is necessarily related to the length of the steps because it must be done a little in advance since proof will be required to obtain the car loan. That said, the rates can be more advantageous .

The personal loan to buy a car

The personal loan is a consumer loan granted without any need to justify the use, that is to say that no document is requested in this sense and that there is no allocation between the conclusion of the credit and an act of sale. It is the loan in opposition to the classic car loan. This financing has the advantage of being read faster to materialize but is oriented rather for cheap cars, on occasion. Note that it is possible to borrow a little more than the amount of the vehicle to cover registration costs for example. The rates can sometimes be higher given the speed of execution.

The revolving loan, charging system

The revolving credit is a reserve of money that can be used several times and that smoothes the repayment on several times, or to postpone the deductions until several months later, which avoids ending up in red when buying. This loan is rarely used for the purchase of a car because its cost is relatively high and this loan requires a card payment for amounts generally lower than € 10,000, there are few vehicles in this price range at the dealers Moreover, who accept credit card payments.

Automotive leasing

Rather than buying, some prefer to rent. But make no mistake, car leasing is well linked to a car loan. That is, it is the financing agency that buys the vehicle and then rents it to the borrower for rent. The concessionaire sets up the contract and the conditions of use then the lessor is in charge of checking the solvency of the borrower to grant him or her its lease with option to purchase (LOA) or its long-term lease (LLD). The LOA allows you to buy the vehicle at the end of the contract, at its residual value, that is to say at the value defined with the dealer at the signing of the lease. As soon as the contract ends, the loan related to the lease is also closed. Note that it is possible to make a transfer of leasing, which avoids refunding the penalties in case of return of the car.

 

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