Monthly Archive: February 2019

The 3 Financing Models for a New Car

Whenever a new car is to be acquired, the question of financing always arises. The consumer has the choice between three different ways of financing. Further illustration at hitomi-gyousei.com

Even if there is public transport, car-sharing models or car-pooling: many can not or do not want to do without their own car. But even an older used car already costs a penny of money. Consequently, the question arises as to how the mobile pedestal should be financed.

There are various options for the consumer into consideration. The three most important models for financing a car are the following overview. Since a purchase for private purposes is assumed, there are no possible tax advantages of the respective type of financing.

Financing model: the cash purchase

Financing model: the cash purchase

Any financing that relies on outside funding will incur additional costs. If the necessary money is available, the consumer should therefore opt for a cash purchase. An exception would only be made if the money has already been invested or can be invested in such a way that the credit interest rate is significantly higher than the interest charge through debt financing. Given the current level of interest rates, this case is likely to be extremely rare.

A cash purchase not only offers the advantage that there are no additional costs. Instead, the consumer can sometimes negotiate a good discount if he pays the vehicle directly. Instead of a discount on a new car is also conceivable to agree on an additional equipment or extended services. Another plus point may arise with regard to motor insurance. Because many insurers offer a discount if the vehicle was financed by cash purchase.

Financing model: debt financing

Financing model: debt financing

In many cases, your own funds will not be enough to pay for the car. Around two-thirds of all new vehicles registered in Germany are financed by borrowed funds. If the consumer needs a loan to finance his car, he has the choice between different providers:

  • A credit at the house bank : The credit at the house bank will be the most expensive alternative in most cases. Because with the conditions of a car bank or a direct bank, the house bank will rarely be able to keep up. On the other hand, the house bank will often be more willing to grant a loan, if the conditions are not optimal, than a foreign provider.

 

  • A loan from another bank : To find the cheapest possible deal, the consumer should always compare several loan offers. Because the consumer is not obliged to turn with his loan request to his house bank. In a credit comparison, which is easily possible via online comparison portals, the term, the annual percentage rate and the total cost are the three most important criteria. However, the consumer should take a close look when a bank promotes particularly favorable terms. Because often are sold together with the loan agreement packages that include, for example, a residual debt insurance or insurance for illness or the occurrence of unemployment. Since the costs of such additional packages are not included in the effective interest, the bottom line loan can be significantly more expensive than initially thought.

 

  • A loan at the dealership’s bank : Many car dealerships also offer financing and advertise with very favorable conditions or even 0 percent financing. However, the consumer can only figure out how good an offer really is if he carefully calculates and compares the offer with the credit offers of other providers.

Regardless of whether the house bank, another bank or the auto bank is the lender, it is always true that this is a consumer loan contract. And a consumer contract is subject to special requirements. For example, the lender must provide all relevant information about the loan and inform the consumer of the existing right of withdrawal.

When choosing the lender, the consumer should pay attention but one point: If he takes the loan at his house bank or another bank, he is the car dealer to the cash payer. And at a cash purchase, the consumer has the opportunity to negotiate a decent discount. This discount, in turn, can quickly offset the perhaps slightly higher lending rate.

On the other hand, if the consumer finances the vehicle through the car dealership bank, he usually benefits from very favorable conditions. However, he will not be able to negotiate discounts, but usually have to pay the full price. The bottom line is that it can be even more expensive. For example: The car dealer offers financing with an effective interest rate of 2.9% and a maturity of 48 months.

At the house bank 7% interest is due for the same loan amount and term. At first glance, the offer of Autobank seems much cheaper. If the consumer bargains with the dealer but a discount of just under 7.5%, he secures the same conditions as at his house bank. If the consumer can get an even higher discount, the credit of his bank is even cheaper. There are dealer discounts of 10% and more quite within the usual. It is worthwhile to calculate well.

Special forms of car loan

In addition to the classic installment loan, there are two special loan models for financing a car. The first variant is the balloon loan. In the case of a balloon loan, the consumer makes a down payment at the beginning, then pays monthly loan installments and ends the loan at the end of the term with a final payment.

The monthly loan installments are usually very cheap with the balloon loan. But especially the final payment is very high, it can make up to 65% of the loan amount. If the consumer can not afford the final payment, he needs follow-up financing. It is often quite expensive.

The second variant is the three-way financing. It works similar to the balloon loan. Even with the three-way financing, the consumer pays a down payment and low monthly payments. However, unlike the balloon loan, at the end of the term, the consumer can choose to return the vehicle to the dealer, buy the vehicle through a final installment, or continue to finance it. In both forms, the costs are difficult to estimate. And there may be inconsistencies in determining the residual value of a vehicle return. Therefore, the special forms of vehicle financing should be treated with caution.

Financing model: the leasing contract

Financing model: the leasing contract

While leasing has long been of particular interest to business people, more and more private individuals are discovering this form of financing for themselves. The lease is, very simply explained, a kind of lease.

The consumer does not become the owner of the vehicle. Instead, the vehicle is left for use. Usually, a bank buys the vehicle as a leasing company. The consumer becomes the lessee and can use the vehicle for a certain period of time. For the use he pays monthly installments, which are counted on the purchase price.

At the end of the contract period, the consumer can then return or buy the vehicle. Leasing is also available in different variants. Often a loan is for the consumer but the cheaper alternative.

Loan with negative remarks

You need urgently money and have a negative remark entry?

You need urgently money and have a negative remark entry?

In fact, there are opportunities to get a loan, and that without remark information. The Internet nowadays offers alternatives for people with negative remark.

What are the options for getting a loan without remark?

What are the options for getting a loan without remark?

In the last few years, many providers have emerged that specialize in a loan despite negative remark. There are no big differences when it comes to borrowing. A credit without remark differs only in that remark entries are not covered by the credit check.

Foreign banks grant loans without remark

Foreign lenders that can be found on the internet offer loans without remark. Of course, these are not banks like in Austria, Sweden or other EU countries. Mostly these are mostly foreign banks in Switzerland or Liechtenstein. These do not work together with the German remark system, which is why this type of credit rating is not checked.

Even individuals offer loans without remark

Meanwhile, there are also individuals who want to invest their money in something. Therefore, these wealthy people make themselves available and give loans to other people. No remark information is required for this. Depending on the type of loan and the amount you have to search for different lengths to find the right private person for a loan.

What do I have to do to get a loan from a private person?

What do I have to do to get a loan from a private person?

In the beginning, only the loan amount and the reason for the application must be stated. Within 24 hours, a private person will be found who agrees to give this loan. Subsequently, personal data of the customer are given and the contract can be concluded.

Why do foreign banks or individuals offer such loans?

Although, depending on the provider, the effective interest rates vary, these are almost always higher than when a normal loan. Of course, banks are aware of the high risk of taking advantage of it.

Get out cheaper with credit comparison

Get out cheaper with credit comparison

If you are not sure which loan is the cheapest without remark, the interest rates can be compared on various sites on the Internet. This makes it possible to see at a glance how high the interest rates are at which term and rate. In addition, one can take a list of all reputable providers.

Can I make a loan directly online after requesting the loan?

For foreign banks, after a loan application and a positive credit check, you will have 14 days to reconsider the loan agreement. If you would like to accept the offer, you must send the previously signed COD documents signed. For personal loans, the procedure is a little faster The loan can often be paid as early as 1-2 business days.

Do I have to fulfill requirements?

Yes, because the risk is very high for these banks and individuals, certain conditions must be met.

  • Minimum age of 18 years
  • Residence in Germany
  • Regular income
  • Without permanent employment a guarantor is necessary

How to get a loan for car repair?

Every year more and more cars appear on our roads. This type of transport has become an integral part of our lives. Many people can not imagine my life without a car. Having a car means a certain level of comfort. More information at labeurettenue.com

Therefore, any technical breakdown of the car or an accident is immediately reflected in the usual rhythm of the life of the motorist. Therefore, how to get a loan for car repairs, read the article.

In such cases, the owner of the car is in search of funds for its repair. Currently, not only the purchase, but also its repair is an expensive pleasure. Free cash is held by a few of our fellow citizens.

What to do in this case?

One of the most popular ways is the design of the loan, designed for auto repair.

To draw up a loan agreement you must follow several rules.

If motor vehicles suffered significant material damage, then you need to think about applying for a loan directly at a banking institution.

Some commercial banks have developed credit programs that are offered for car repairs. It should be noted that the interest rate on this type of loan is not very high. You can easily find loans at 20% per annum.

The loan agreement is made for at least one year.

The loan agreement is made for at least one year.

 

The peculiarity of the contract is that the car is in the pledge of the banking institution, but the owner has the right to use the vehicle freely. Immediately after the repair, the owner of the car can sit at his wheel. But you should not forget about the obligations to pay the loan.

To draw up a loan agreement, the owner of the car must provide the bank employee with the original document, which confirms the identity, identification number, and documents on the ownership of vehicles. The loan is issued on the amount that is confirmed by the estimate.

The estimate is prepared by representatives of car service.

Features of the loan for auto repair

Features of the loan for auto repair

 

Lending for the repair of the vehicle has some peculiarities. According to banking rules, it is the financial institution that determines the list of automotive services that should be addressed to the owner of the car for its repair.

And as practice shows, the cost of repair work at such service stations will be significant.

The nature and purpose of the loan for car repairs

The nature and purpose of the loan for car repairs

 

It is worth noting that this loan is targeted. Money can be spent only on the work indicated by the service station. Money is not given to the owner of the car on hand. The entire loan amount is transferred to the bank account of the company, which will repair the car.

Not all customers can agree to such terms of the loan agreement. In this case, the motorist can get a loan for the necessary needs. After that, the owner of the car can independently choose a company that will carry out the necessary repairs.

Then the borrower will face another problem. The interest rate on this type of loan is not less than 35%.

Another option for repairing a car on credit

 

To date, loans for the repair of the machine provide not only banks, but also directly automobile workshops, and even automobile pawnshops.

It should be noted that these organizations are most interested in the condition of the car. The state of finances of the owner of road transport fades into the background.

Enterprises do not conduct a customer solvency check. Therefore, to execute a loan agreement, you need to provide only a document confirming the identity and documents of ownership of the car.

What is different about getting a loan from a banking institution and car workshops or pawnshops?

 

Making a bank loan takes a long time. Sometimes it takes several days or even a week from the moment a loan agreement is signed until the moment the money is received.

Credit in the car shop is obtained for a considerable less time. One day is enough. So, the money can be obtained the next day after the signing of the necessary documents.

Of course, for this, representatives of the workshop or pawnshop must assess the extent of the damage caused to the car. In order to carry out the assessment, the vehicle owner must provide the vehicle.

The advantages of working directly with a car service is that in case of a shortage of cash, the organization provides the ability to quickly obtain a loan. It should be noted that the loan is provided for a short period of time.

Disadvantages of a similar credit scheme

Disadvantages of a similar credit scheme

 

But this lending scheme has some drawbacks. The car remains in the parking lot car service for a time until the borrower does not fully pay the loan. The car is a guarantee of payment of debt. Usually such loans are provided at significant interest rates.

The term of the contract is limited. As practice shows, it can be no more than one month.

Thus, repairing a car on credit is quite possible. But the option of lending is chosen independently. Both lending at banking institutions and car loans at car repair shops have advantages and disadvantages.