Is the car loan eligible: features, conditions and recommendations

In a large metropolitan area, a caris not a luxury, but a necessity. Today almost every third citizen of the Russian Federation has his own vehicle. However, not everyone can buy a car, and more often people resort to getting a loan to buy a car.

Today there is a huge amountall sorts of programs for which you can get a loan. To take money in a debt offer motor shows. Is it advantageous to take a car loan? Feedback on this account is positive or negative? Consider the opinion of experienced car owners regarding this issue, as well as possible pitfalls that a person may face.

Features of car loans

Talking about whether a car loan is profitable in the first placeturn it is necessary to understand that loyal financial institutions do not exist. Both banks and auto dealers, offering to borrow from them, pursue one single goal - profit making. It is necessary to understand that the credit organization is not a relative, from whom it is possible to intercept money before the salary. In any case, you will have to pay a certain percentage for using the funds.

Nevertheless, this procedure is very beneficial, because a person can receive a fairly large amount of money one time, while it will take many years to accumulate on a car alone.

However, before you sign a contract, you needapproach the issue with a clear head. It is necessary to understand whether a car loan is profitable. Reviews of other borrowers in this matter will be very useful. Experienced car owners recommend paying attention to the maximum loan size, interest rate and the amount of the down payment.

It is also worth considering additional commissions andterm, which is given to repay the loan. It should be understood that, in cooperation with any financial structure, there is a risk of overpaying too much. Most often, nobody hides these figures. The problem is that the potential car owners themselves do not want to take the time to study in detail the contract they sign.

First of all it is necessary to understand that the mainthe pledge for obtaining a car loan is the car on which the money is spent. If during this time something happens to it, then it can result in quite large costs. You also need to understand that before the full payment of such a loan, your car can not be sold in any case. The same goes for gifts or exchange.

Among other things, talking about whether it is profitablecar loan, it is worth considering that the new car must be insured. This is a prerequisite for obtaining a loan. Proceeding from this, there is more and more unnecessary expenses. Therefore, it is worthwhile to consider in more detail the conditions of lending, or rather those moments that look quite different from what the credit institutions themselves think.

Increase in insurance premiums

If a person takes a loan from a bank, then, asusually, he is recommended to insure himself in certain companies, which, in fact, are partners of a financial institution. At the same time, the bank receives its commissions for each directed client. But to a man who wants to borrow money, on the contrary, it is necessary to over-pay quite a lot.

If it is a question of acquiring a newmotor vehicle, the car dealership can oblige the client to insure the car immediately for the entire loan repayment period. This will result in a pretty decent sum of money. However, one important nuance must be taken into account. No institution has the right to force its clients to bring insurance policies. If a person does not wish to perform this procedure, then he has a legal right to refuse it. In this case, the lender can only raise the interest rate on the loan, which again calls into question whether the car loan is profitable.

Imposing life insurance

In addition to car insurancemeans, employees of the showroom can demand to bring a policy that confirms that the borrower himself is insured in case of death or disability. Similar certificates are also not cheap.

As in the first case, the client is not required to comply with these requirements.

Without CASCO

This slogan is very often found in the draftapplications of many car dealers. Indeed, some banks today can provide loans without mandatory registration of the CASCO certificate. However, you should not flatter yourself about this. The fact is that in this case no one will be forced to bring insurance. Lenders will simply raise the interest rate, and as a result, the amount will not change. Is the car loan favorable for such conditions? No, but the borrower does not lose anything. He just pays the same, believing that he won on overpayment.

Are there low interest rates?

Many people are interested in whether a car loan is advantageous with a residual payment provided that the overpayment is reduced.

This is another trick that often goescar dealerships and banks. The purpose of this psychological move is to inspire the person that the interest rate is reduced to such a minimum level that in fact a person will not pay anything practically. Is it really?

It is necessary to understand that there is a general credita rate that is rarely changed by someone. These figures are only relative, and no one assures the client that they will indeed be listed in the contract.

Even if the contract specifies thatoverpayment will be 2% per annum, then a little lower, with a detailed examination of the document, you can find a small font, which lists the additional commissions that will very quickly cover a lower annual percentage. As a result, the customer will still make a pretty impressive overpayment. It is necessary to understand that it is not profitable for a bank to give money for a long time almost free of charge, no one will ever be engaged in this.

Interest-free loans

We pass to the next pitfall, whichsounds even more absurd. Such loans, which indicate that overpayment will be completely zero, should be bypassed for several kilometers. The fact is that behind such tempting slogans most often hide the most unattractive terms of the contract.

Even if the company turns out to be conscientious, thenyou need to understand that in this case, most likely, you will have to pay 50% of the cost from the car as a down payment. Also, most often the crediting period should not exceed 1 year. If the repayment term, by contrast, is many years, then there may be another trick. The fact is that many, arguing whether it is profitable to extinguish the car loan ahead of schedule, decide to pay the balance immediately. However, according to some treaties, it is forbidden to do so.

In addition, it is necessary to insurea motor vehicle in the place where the representative of the bank himself indicates. In any case, interest-free credit will be beneficial only to the organization that provides cash loans. A potential car owner can never win anything on this. Even if the down payment is 0% of the cost of the vehicle, then most likely it will mean that the subsequent interest rate is increased.

What to look for when buying a car on credit

In order not to get into a financial pit, first of allit is not recommended to hurry. The contract needs to be studied in detail. It is advisable to show it to an outside lawyer. If an employee of a car dealership or a bank insistently says that this is a standard contract, then it is worthwhile to think whether the loan granted will not be a fraud.

It is not recommended to sign the contract immediately eitherto whose case. If a person is not familiar with jurisprudence and does not know the laws, it is best to take the contract with you home and learn more about it. Most attention is recommended to pay the figures specified in the contract, especially those that are prescribed in small print.

Is there any point in taking a loan for a car in a bank?

Is car loan viable? Or a consumer loan in a bank is better? It is necessary to understand that loans in the showroom - by and large the same, if the registration took place all at the same bank. Only in this case the auto show plays the role of an intermediary. It is not difficult to guess that when carrying out such a procedure, a large percentage of the person will be charged, so the car dealership also needs to receive a certain benefit. It is much easier to contact the bank directly.

Is it profitable to refinance a car loan

Usually it is very difficult to answer this question,However, if it is a question of buying a car, then this kind of re-lending is really quite a profitable solution. However, everything depends on the conditions of a particular credit institution. If, after the transaction is formalized, the terms of the loan will be the same, it will be somewhat more convenient for a potential car owner.

However, try to optimize your costs orto reduce the total amount is not worth it. In any case, it will not work. It is necessary to understand that refinancing is exactly the same target loan, which is simply taken in order to repay the already existing loan. Accordingly, the amount by and large does not change. It is much easier to take money from the bank right away in order to acquire an automatic telephone exchange.

Is it advantageous to take a car loan in the showroom? In terms of costs, there is no difference. However, when registering a loan with a bank, there is a chance to receive benefits.