Know how to finance a car – Immediate loans

Know how to finance a car

Sepa cómo financiar un coche 300x200 Are you thinking about getting a new sweet ride lately? You’re not alone. The car industry in Spain had its year of highest sales recorded during 2016, that year they sold 11% more in cars than during the year 2015.

<img style="padding: 10px; float: left;" src="data/article24316_images/article_24316_0.jpg" alt="Sepa c&oacute;mo financiar un coche 300x200" /> Are you thinking about getting a new sweet ride lately? You

Some of the reasons for the boom are fairly easy to identify, such as a recovering economy, low oil prices and a large amount of repressed demand as people finally replace the old cars they have been caring for during the crisis in previous years. But the biggest hidden factor is, trust. People who are pretty sure they will have a job in the future are willing to take on some debts to get a new car.

To find a car loan that does not cost a pump, compare all financing options before entering the car’s display yard. Optionally, if it is your case, find out about the loans for used cars .

With this in mind, follow these basic points to know how to finance a car:

Bank loans

Bank loans

Banks and credit unions offer pre-approved loans that let you know in advance how much you can borrow. If you already have a loan, it may be possible to change it to include financing for a car .

Extend a mortgage

 

Homeowners can extend their mortgage or use a “revolving credit” loan. This is a way to borrow a car at the mortgage interest rate, which is probably lower than other loan rates. But if we add the cost of a car to a mortgage and we do not pay it for many years, it will end up costing much more in the general interest than in comparison with the payment of a car loan in one or two years.

Therefore, by following this route, it is smart to increase mortgage payments to settle the car’s debt as quickly as possible. We do not want to end up paying for an old car while trying to pay for a new one!

Loans of financial companies

 

Car dealers often offer loans that are actually provided by a financial company. The dealer will often sign us up for a car loan as part of the purchase process.

Find the best interest rate

Find the best interest rate

The interest rates on car loans can vary widely, so we should compare prices. Agreeing an “insured” car loan usually means a lower interest rate. This means that if we do not comply with the payments, the lender can sell the car to recover the money owed.

If we have an existing relationship with a lender, it is often easier to access cheaper loans. For example, a credit union could offer loans for cars with better conditions for its current members.

Checking fees and charges

Checking fees and charges

There are always fees and charges involved when getting a car loan. The documents provided by the lender must show them clearly.
Expect to pay a loan establishment fee. Some lenders may encourage insurance or optional guarantees. All these will be added to the total amount borrowed.

Help always ask the lender to communicate all fees and charges during the entire repayment period. They must reveal a unique dollar amount of what the loan will cost. Compare the charges and fees with the price of the car. It may be that the charges exceed the interest you would pay in a different type of loan.

Loan repayment insurance

Loan repayment insurance

Some lenders offer loan payment insurance. This usually means that, if the borrower dies, the insurer pays the lender the full amount owed. These policies also cover loss of income, such as accident, illness or dismissal, so reimbursements are made for a period of time specified in the policy.

The reimbursement insurance premium can be expensive and not always easy to see in the loan contract. If the premium is added to the loan, you will pay interest on the premium and the car loan.

Check offers offered by as many lenders as possible, including banks and credit unions. By law, a lender can only charge reasonable fees, and you must also submit a disclosure statement that details all the terms of the loan. This should happen before signing, or within five business days after signing.

Request a copy of this statement and read it carefully before agreeing to any agreement. If the statement is difficult to understand, ask questions and a budget consultant can help you get answers. Also calculate the total interest on the loan, or even in the car review : use the loan calculator ordered to do this.

Take the time to decide. A hasty decision can be costly when borrowing money. Many of us overestimate the amount of debt we can carry.

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