Do you intend to buy a vehicle, but like a large majority of households, you do not have the capital to finance it?
In this case, taking out a car loan is the ideal solution. You will be able to make your automotive project a reality, without necessarily needing a personal contribution. With Sky Finance, experience a fast, efficient and transparent auto loan, in just a few clicks!
A car loan is a loan intended to finance the purchase of a new or used car. It falls into the category of consumer credit. This type of loan is triggered on the purchase of a car and cannot be used for the purchase of another asset, like a motorcycle loan. We then speak of affected credit.
Thus, it differs from a personal loan which aims to strengthen a cash flow. The car loan or car loan is therefore better perceived by a banker than the personal loan.
For the purchase of a new or used vehicle, the way the auto loan works does not change.
Obviously, prices are very often different between a new and used vehicle. Therefore, the volume of credit is not the same. But in the case of a new vehicle, the banker takes into account the contribution of cash to the resale of the vehicle if this takes place within the first 5 years after the purchase.
In the case of a used car, even if the price is less important, the cash inflow on resale is often less. Before taking out a car loan, calculate your car borrowing capacity carefully so you have an idea of the maximum loan you can apply for.
In an auto loan offer, you will find a number of elements. These determine the total cost of the loan (expressed in euros), and vary from one lender to another. Hence the interest in comparing the different offers sent to you. Below are the 3 main factors to consider.
Expressed either in months or in years, the repayment period corresponds, as its name suggests, to the period during which you will have to repay your loan.
A monthly payment determines the amount you will have to pay each month. They are closely linked to the duration of the loan: the shorter it is, the lower the interest, and vice versa. But obviously, in the case of a short duration, the amount of monthly payments is revised upwards. It is therefore important to take into account its resources.
The annual percentage rate of charge (APR) must be distinguished from the nominal rate. While the second includes only a tiny part of the costs, the first covers all the costs associated with credit, namely interest, administration fees or even insurance contributions. It thus reflects the real cost of auto credit. So it is indeed the APR that you need to study if you want to obtain the most advantageous loan.
On the other hand, if your personal contribution (if any) is significant, the lender will be more willing to lower the APR. So, on the assumption that the purchase of your car is not urgent, and if your income allows it, give yourself a few months to save.