Owning a personal vehicle is very convenient for commuting, but if you have decided to change your car, whether for a new or used model, you often need to use a credit to get it . The following tips will help you find the cheapest car loan.
The different types of credit
To begin, you should know that there are two kinds of credits: the fixed interest rate loan and the adjustable rate loan.
The first allows to pay a fixed monthly payment over the entire term of the loan while the second is a credit whose monthly payments will change according to the terms defined in the original contract.
The revisable rate has the advantage of having to pay less at the beginning and to be able to repay faster. Before signing the contract, consider the optional fees that will be added to the amount to be reimbursed.
These fees are sometimes included in the APR (Global Annual Effective Rate) initially, while in some cases, they will have to be paid separately, which will result in additional costs, therefore caution.
How to find the right credit agency?
To obtain a loan, you must take out a loan with a financial institution. There are different lending institutions: banks, credit organizations …
And conditions vary from one institution to another. To find the cheapest formula, you can use our comparison tool. You will find a simulator that will allow you to get the credit agency that suits you best.
At the end of the simulation, you will get live offers that you will only have to compare to find the one that meets your expectations.
Compare different credit offers
To find the most advantageous credit, do not hesitate to compare the offers offered by the different lending institutions.
Depending on the amount you want to borrow, you should also know your repayment capabilities. Do not get into too much credit that will burden your budget.
In this case it is better to borrow over a longer period of time, for example 60 months, and pay less than to pay a heavy credit over 36 months. Now be aware that the longer the repayment period is spread, the greater the total amount to be repaid.
Second, lenders do not always offer the same APR. The lower it is, the smaller the amount to repay.
In addition, some credit offers sometimes contain the maintenance of the included vehicle throughout the repayment period while in other establishments, it will be necessary to pay more to obtain this non-negligible option. So read the terms of the loan agreement before signing.
A personal contribution to borrow less
It is obvious that you will have less to repay if you borrow less. You can use a personal contribution to decrease the amount of the credit.
What is it about ? A personal contribution is a sum of money you have to invest in the purchase of a good. If the vehicle you want to buy costs for example 10 000 USD and you want to borrow only 5000 USD, you can use a contribution of 5000 USD for the credit is less important and your monthly payments are less burdensome to assume .
This contribution can come from an inheritance, a sum of money that you have saved for several years. It may also be the purchase of your old vehicle. To sell it at the best price, find out beforehand on its argus rating so as not to lose precious USD.
Then, go around the different garages to find out which offers the best offer of recovery. You can also sell your old car to an individual.
You will have even more chance to sell it more expensive than a garage that has to rely on its profit margin when buying a used car. Know that a garage that bought a vehicle argus will sell at least 1000 USD more.
Wait for the right moment to borrow
Some periods are more conducive to borrowing than others. Indeed, before changing vehicles, it is sometimes wise to wait for garages to make their operation ‘open doors’ during which cars are offered at advantageous rates.
By paying a cheaper car, the credit rate will of course be lower since you will have less to borrow.
You do not have a personal contribution and you do not know if your credit application will be accepted? To put all the chances on your side, the best is not to have other credits in progress.
Because when you go up your loan application file, a bank history will be asked. If the management of your account is healthy, you should not have any trouble getting a loan.
On the other hand, if you are debtors and you already have trouble repaying other credits, it will be difficult to get a favorable answer.
If all your old credits are sold, do not hesitate to make a comparison on our site.