Loans are increasingly being requested online today. This also applies to car loans, which are among the most common types of credit. Before concluding, however, you should look closely and compare.
How to find the right form of financing to buy the dream car
A new car cannot always be purchased with your own financial means. This is where a car loan comes into play. Like many other types of credit, this can be applied for online. Those interested in a motor vehicle loan are spoiled for choice because many providers advertise with favorable terms. This includes special car banks as well as house banks and direct banks.
If you want financing for the purchase of a motor vehicle, you should therefore not choose the first best offer, but make a precise comparison and take into account all available types of financing.
Installment loan, car loan or balloon loan?
Regardless of the type of bank, there are various financing options to choose from. In the case of classic installment loans, for example, the borrower is granted a certain, predetermined amount, which is then repaid in monthly installments. The situation is similar with car loans: in this case, the loan is not freely available, but is linked to the purchase of a motor vehicle.
A so-called balloon loan appears advantageous at first glance, because the monthly installments do not have to be used to pay off the entire amount, which keeps the burden low. In the end, however, there is a remainder that has to be settled or refinanced at once: In the end, the balloon loan is often more expensive than comparable models.
From three-way financing to leasing
Three-way financing is particularly popular in connection with a car loan. It consists of a down payment, an installment loan and a final installment. After the agreed period, the borrower has the choice of purchasing the vehicle by paying the final installment, refinancing the final installment, or returning the vehicle to the dealer. This flexibility makes the three-way financing very popular. Leasing is not a regular car loan, but simply the financing of the use of a vehicle. This variant is mostly chosen for commercial use. At the end of the term, the leaser can also decide whether to buy the motor vehicle, extend the leasing contract or return the car to the dealer.
The house banks in particular offer personal advice on motor vehicle loans. An online credit comparison is suitable to include all available credit options and to determine what is suitable from the offers of the respective banks. After giving some data and facts, this lists all relevant information and thus provides information about which vehicle loan is best suited to the individual situation.