To find a car loan that won’t cost you assets – compare all your financial options before getting into business. Banks and credit unions offer pre-approved loans that allow us to determine in advance how much we can borrow.
Tricks when concluding car loans
For a person who has already granted a loan, the change may be changed to car financing.
Homeowners may be able to extend their mortgage or use a “revolving loan”. In this way, we can borrow a car at a mortgage rate that is probably lower than other loan rates.
But if we add the cost of the car to the mortgage and we do not pay it back for many years, it will cost a lot more in general than when we pay for the car loan in one or two years.
So this way, it’s smart to increase your mortgage repayments to pay off your car debt as soon as possible. We don’t want to pay for the old car after all, trying to pay off the new one!
Loans for financial companies
Car dealers often offer car loans that are actually provided by a finance company. The dealer often registers us for a car loan as part of the purchase process.
Finding the best interest rate
Car loan rates can vary significantly, so we have to look around. Accepting a car loan “secured” by a car usually means a lower interest rate. This means that if we do not pay you back, the lender can sell you a car to get the money back.
If we have an existing relationship with the lender, it is often easier to access cheaper loans. For example, a credit union may offer car loans with better access conditions for its current members.
Checking fees and charges
There are always fees and commissions associated with getting a car loan. The documents that the lender provides should clearly disclose this. We should expect to pay for the loan. Some lenders may encourage optional insurance or guarantees. All these amounts will be added to the total amount borrowed.
It always helps – ask the lender to transfer all fees and charges throughout the repayment period. He should disclose one total amount in zlotys how much it will cost. We can also compare the price with the price of the car. It may happen that the fees are more than the interest that we would pay for a different type of loan. There may be fees for terminating the loan (penalties for early repayment) and non-default fees (missing payments).
Loan repayment insurance
Some lenders offer loan repayment insurance. Essentially, this means that if we die, the lender will receive the full amount due from the insurer. And if we lose our income through our own fault (e.g. accident, illness, dismissal), our repayments will be covered for the period specified in the policy.
The insurance premium can be expensive and not always easy to see in the loan agreement. If the bonus is added to the loan, we will pay interest on the premium, as well as the car loan itself. It can also be an unnecessary cost. For example, a person who does not have a paid job will not need protection against dismissal. Everyone will find information helpful in making a decision about possible insurance.