A new car in a hurry? Very few people can afford this. According to statistics from the central association of the german motor vehicle trade (ZDK), a new car in 2015 has average 28.590 euro cost. Many car buyers therefore resort to a loan to pay for the new vehicle. What you should bear in mind when taking out a car loan, you can find out below.
This is how a car loan works
With a car loan, you pay back a fixed installment every month within a certain term. The lending bank charges a certain interest rate for this. This is, depending on the provider, creditworthiness-dependent or creditworthiness-independent. With creditworthiness-independent loans, every borrower pays the same interest rate. In the case of a creditworthiness-dependent interest rate, the credit institution calculates an individual interest rate for you. This depends on your creditworthiness. To determine it, the savings bank or bank checks your financial situation. To do this, you need information about your monthly net income, any additional income and regular expenses. In addition, the bank checks your payment history with credit agencies such as SCHUFA.
You can adjust the loan amount and the term of the loan to suit your individual needs. On the website of the nassauische sparkasse there is a loan calculator, which you can use to work out what the monthly rate will be for a given loan amount and term. Make sure that the rate is only high enough so that you can pay it back without any problems. If you should have more money at your disposal, for example Christmas money, you can choose between make special payments. How to pay off your loan faster or reduce the monthly installments. It is even possible to pay off the entire loan at once. However, the bank may charge a so-called early repayment fee of a maximum of 1.00 percent of the repaid amount.
If it has to go fast
Once you’ve found the car of your dreams, you’ll want to pay for it right away and take it home with you, instead of waiting weeks for the loan to be approved. If you apply for your loan online at the Sparkasse, you will receive a credit card online instant approval, if you meet all the conditions. For this, a budget calculation is carried out. In an online form, for example, you enter your net income, your living situation and your regular expenses such as insurance premiums. Once you have submitted the form, the Sparkasse will inform you of its decision immediately. A few days later, you will have the loan amount in your account.
Financing a used car
Used cars are cheaper than new cars, but for many they are still too expensive. In principle, the same financing options are available to you for a used car purchase as for a new car. Car banks even offer special used car loans to. However, you can not buy every used car on credit. Some banks offer loans only for used cars up to a certain age. If you can’t get a car loan because the first registration was too long ago, you still have the option of a normal installment loan.
House bank or autobank?
Car financing is offered both by normal banks and by car banks linked to car manufacturers. The car banks usually offer a low interest rate, but that is not always the cheapest financing. If you take out the loan with a normal bank, you can act as a cash payer when you make the purchase. Many car dealers grant high discounts in this case. If you are financing the car through the manufacturer’s bank, you do not have much room for maneuver. You buy the lower interest rate with a higher purchase price. In addition, the low-cost offers are often tied to certain car models and equipment levels. therefore, before you buy a car, compare different offers and financing options before you decide on a loan. For example, comparison portals and car loan calculators on the Internet can help you do this.