The classic can be used as an installment loan. Banks offer special car loans, in which the vehicle registration is often deposited as security. Financing through the dealer is also very popular. In addition, the trend financing such as the balloon loan or the three-way financing. More commentary at http://lionsshopnflofficial.com/personal-debt-consolidation-loans-get-a-fast-christian-debt-consolidation/
Which car buyers choose depends on various factors.
Car loan, what documents do you need?
So the disposable income plays a very important role.
Each of these types of financing has its advantages and disadvantages. For example, car buyers opt for balloon financing or three-way financing, since very low rates are incurred during the term.
At the end there is the final installment, which can either be paid from reserves or financed further.
Car loan what documents? What to pay attention to?
Who takes out a car loan which documents should pay attention to two aspects. That is the loan term and the resulting credit rate. Both can be set as desired. So with a long term, the credit rate becomes lower, while a short term brings high rates. For example, if you opt for a term of six years, you pay lower rates than for a term of four years.
Even if lenders are pushing to repay the loan as soon as possible, care should be taken to ensure that the loan rate fits into the monthly budget. However, the loss of value of the car decreases with a long running time.
This is referred to as a loss of value if the term is longer than 48 months.
Car loan what documents? The funding
If the borrower only wants to use his car for a short period of time and then sell it, the term should be kept short. Of course, the models and the brand of the car are crucial when it comes to financing.
For example, a Smart costs less than a top-class Mercedes. In general, the purchase price and a down payment have a corresponding effect on financing. Loan offers from the dealer, the car bank or a bank vary greatly in terms of their conditions. The effective annual interest rate should be used to check the offers from the dealer and the bank.
The auto loan comparison shows suitable online loans from banks.
Car loan what documents – requirements
Whoever decides to finance the car loan which documents must have the same requirements as for an installment loan. However, further information about the vehicle is required. An unencumbered credit bureau is important for a car loan, as the borrower must be of legal age.
Some lenders also have an upper age limit. For example, seniors aged 70 and over often no longer receive credit. If so, this must be secured in a complex manner. An account should exist in Germany, as should the place of residence. The borrower must have German citizenship or a valid residence permit. A regular and sufficient income that is above the attachment limit.
A permanent employment relationship that is not limited and does not receive a trial period. Anyone who has to pay a high liability or a low income will find it difficult to obtain a car loan.
Car loan what documents? – The credit documents
What documents are required for a car loan? The credit documents are actually the same for all lenders. The pay slips of the past few months must be submitted. In addition, the bank statements from the same period.
In the case of the self-employed, income tax assessments from recent years serve as proof of income. A copy of the purchase contract or the registration certificate part II (vehicle letter). In addition, the brand and model of the car to be financed influence the documents and the loan. The first registration and the mileage are also often assessed.
Some lenders also require a copy of the employment contract or pension notice.
Different financing options
If you decide to buy a car but do not yet know how long you want to drive the car or only want to use it to a limited extent, three-way financing would be a good form of financing. This type of financing is usually offered by car dealers.
As the name suggests, borrowers have three options to go by car. You can:
- return at the agreed value
- Fund the final installment again
- or become the final owner by paying the final installment
The amount of the final installment can, however, be reduced with a corresponding down payment or additional repayments. The borrower can now pay the final installment from the reserves and keep the car.
He can also continue to finance the final installment and also keep the car. Then there is still the possibility to return the car to the dealer. To do this, the car must be free of damage and the mileage must not be exceeded.
This finance doctor is similar to that of three-way finance. No down payment is made. However, if the borrower wants this, he can do so, which reduces the final rate. The final installment also applies to balloon financing.
If this has been agreed, it can be refinanced at the end of the term on request. If the borrower does not find any lenders, he can return the car.
The alternative, a very long runtime, does not necessarily have to be advantageous. For example, it could happen that the residual value of the car does not cover the outstanding loan amount.
If you want to finance your new car, there are several options available. But for all types of loans, the borrower should check to what extent and what his loan rate should be.
He should also know that a long term can always be risky. The financial situation could change.
- through unemployment
- a serious illness
- Bankruptcy of the employer
So that the car does not get under the wheels, only forward planning helps. Setting the rates so that all eventualities are covered protects against difficulties.