Car loan which term – choose yourself suitable
Car loan what term – even ensure desired rates
It is important to know that the loan rate results from the term, the loan amount and the interest rate. Generally speaking, a longer term means a lower rate, while a short term shows a higher credit rate.
Most car buyers choose a long term. This at least ensures that the loan installment can also be paid over the entire term. If the term lasts more than six years, the depreciation of the car decreases. If there is an emergency sale during the term, the residual value of the car no longer covers the loan amount still to be paid.
Experts therefore advise a term of a car loan which term is three and six years.
The car loan what term – how long
Anyone who has decided to buy a car, whether new or used, should take the right duration into account. Under no circumstances should it last so long that it extends beyond the useful life of the car.
Many borrowers often finance the next car with a loan. So two car loans would have to be paid. But that is not possible for many borrowers. So the tip: pay the first loan before the second one is taken up. As indicated above, the term affects the monthly loan rate. These should be chosen so that they can be paid for every month without any problems.
It is advised to pay off a car loan as soon as possible, the less the borrower will ultimately pay.
The car loan which term – special repayments
If you finance your car with a car loan, you should make sure that special repayments are allowed in the loan agreement. Especially for employees who receive bonuses or special payments from their employer throughout the year that are to be paid on the loan.
If no special repayments are allowed, the process can become chargeable. Rate breaks should also be noted in the loan agreement. The financial situation of the borrower can also turn negative. A smaller financial bottleneck could be bridged with rate breaks. The contract should also include a change in the credit rate once a year. A loan rate could be increased or decreased depending on the financial situation of the borrower.
With the car loan what term – properly financed
Car buyers have various options for financing their car. First of all, there is the classic installment loan. The advantage of this type of loan is that the rates are constant over the entire term. Financing with the dealer could also be an option.
Especially when it attracts with 0% financing. However, this loan should not be concluded prematurely, since the cash payer discount often tops the favorable interest rate. Customers who opt for an installment loan and pay the loan amount in cash can receive the cash discount. The new trend is towards balloon financing or three-way financing.
Both types of credit are characterized by advantages and disadvantages. Generally, car buyers can use any loan that is offered. Many loans will also be earmarked. Then the vehicle registration document is deposited.
Car loan what term? – 0% financing
Of course, this offer is very attractive at first glance. However, borrowers should ask and check carefully. Because 0% financing does not seem the way it looks. Nobody has anything to give away, neither the car dealer nor the car bank.
If you want to opt for 0% financing, you should question the following facts. The terms can be very short, which brings a high credit rate. As far as the purchase price is concerned, there is no room for negotiation. The alleged 0 interest is counter-financed through the purchase price of the car. This means that they are added to the purchase price in advance. Those who have found their car have little scope.
Apart from the lack of room for negotiation, the term cannot be adjusted to the financial situation of the customer.
Car loan what term – credit check
There will be no credit without the bank checking it. This means that they check the borrower’s income and query the credit bureau. The credit bureau is an important approval factor. If it is encumbered, a loan can be refused.
This is because negative entries indicate that there have been payment problems in the past. Anyone who has decided on a loan must enter personal data such as first and last name, date of birth and address in the form provided.
In addition, a reference account must be specified on which the installments are debited. Information on income and expenses must also be provided.
The checklist for a car loan what term
- A copy of the sales contract
- Pay slips for the past three months
- for self-employed persons, they are income tax notices
- Information about fixed expenses per month
- Possibly other liabilities with details of the remaining debt and the rate
- bank accounts
- Declaration of consent to query credit bureau
Anyone who now receives a loan approval and is a new customer to the lender must use the Postident procedure at Swiss Post. A valid identity card is required.
This procedure is nothing more than a personal identification. Loan seekers should know that a car loan cannot be applied for at the house bank, but at any other bank.
Car loan what term – rate amount
The monthly loan rate must fit into the monthly budget without any problems. A budget could help.
All income is compared to expenditure. The balance is positive if there is a surplus.
However, experts advise that this excess should not be used entirely for a loan installment. There should still be scope for unforeseen expenses.