Learn more about bad credit car loans near me
Car loans are loans granted for the purchase of a car, dedicated to those who do not have enough liquidity to buy the vehicle directly. Bad credit car loans can be requested from the mighty motorlender. Usually, car dealers and dealers enter into agreements with credit institutions, acting as intermediaries between customers and the bank. Agreements whereby in some cases it is possible to obtain loans at advantageous conditions.
As regards the general conditions of auto loans, the interest rate is fixed and the installments are monthly. The periodic installment amount is fixed for the entire duration of the repayment. Some lenders also provide the option to benefit from a pre-amortization period.
Although we are talking about auto loans, it is also possible to apply for financing for the purchase of other vehicles, for example, campers.
Car loan types
Those who wish to apply for a loan to purchase a car can take a personal loan, or choose a loan aimed at. In the first case, the applicant independently finds the necessary resources to purchase the car, by contacting a bank or financial company.
The option that allows you to obtain financing even for an amount greater than that necessary for the purchase of the car. The amount disbursed is granted directly to the beneficiary of the loan, by crediting a current account or with another form of payment. Only once the funding has been obtained then the buyer goes to the dealer to purchase the car.
By resorting to a loan aimed instead the dealer acts as an intermediary between the bank and the recipient of the loan. Hypothesis in which the funded amount is paid by the lending institution to the partner dealer, thus anticipating the price of the car on behalf of the customer.
Once payment has been made to the dealer, the dealer agrees to deliver the car to the customer. The buyer in turn undertakes to repay the loan amortization installments to the lender.
Purchase of new and used cars
Auto loans can be requested for both the purchase of a new and used car. Lenders who grant loans of this type usually grant financing for both the purchase of a new and used vehicle, however, the conditions applied may differ.
This happens because the purchase of a used car is perceived as a riskier operation than the purchase of a new vehicle. Statistically, used car loans are more insolvent.
Those who grant a loan can choose to protect themselves against the risk of insolvency associated with the transaction, applying higher rates or more restrictive conditions to the loan. It is common for the lender to impose a limit on the price of the car you want to buy, or for the duration of the repayment plan.
Best financial for auto financing
But how to find the best loan offer? Although it is not possible to find absolute best financing, using the online comparators the applicant will be able to identify the offers that best suit his profile.
The comparison portals allow in a few minutes to compare the proposals of different banks and financial companies. It is sufficient to insert a few data on the site regarding the desired financing. In a few seconds, the portal will offer the user all the auto loans that meet the preferences indicated.
In this way it will be easy to identify the best offers, comparing the main characteristics of the loans, such as monthly installments and interest rates.
The car loan at zero rate
Zero-interest loans are loans that require the application of a Tan equal to 0%. These are lines of credit generally offered by dealers during promotional campaigns.
However, before taking out a zero-interest loan it is advisable to check what the actual conditions of the loan are. In fact, if the Tan is zero, it does not mean that the Taeg is also zeroed.
In this case, the contractor does not pay interest on the loan to the lending bank but is nevertheless required to pay the accessory costs, which can significantly affect the cost of the loan. Expense items that are taken into account in the calculation of the Taeg, an interest rate that summarizes all the costs associated with the loan.
Although they are rare, there are still promotions that provide for the granting of zero-rate auto loans with Taeg equal to 0%. Products that do not foresee any cost for the beneficiary.
Car loan requirements
But what are the requirements to get an auto loan? In general, the granting of the loan is not subject to the signing of mortgages or the presentation of other collateral. Usually it is sufficient to have a demonstrable fixed income, which must be sufficient to guarantee the regular repayment of the loan.
However, the bank has the possibility to request more guarantees in order to limit the risk of insolvency linked to the transaction. Among the most requested forms of guarantee we mention the signature of a guarantor, who is committed as a guarantor. It is also common for the bank to request amortization installments.
However, it is not possible to establish rules valid a priori, since the request for any additional guarantees is at the discretion of the credit institution.
Difference between personal and finalized loan
We have already said that auto loans can be both personal loans and targeted loans. But what are the differences between these two types of products?
Different factors distinguish a personal loan from a finalized one. The main difference is represented by the fact that personal loans provide for a direct interaction between bank and beneficiary, for those aimed instead the dealer acts as an intermediary.
Another important difference is that the sums obtained with a personal loan are not tied to any use. It is also possible to obtain a sum greater than that necessary for the purchase of the car, using the remaining money at will.
There are also differences regarding the maximum amount that can be financed. With the targeted auto loans it is possible to obtain sums up to 80-85% of the value of the car. Personal loans instead allow you to fully finance the purchase.
Regarding the refund, in both cases, we have a fixed rate. Personal loans, however, allow for greater flexibility with regard to the amortization plan.
Financial and car dealerships
For years now, the dealers have joined the sales activity with that of a financial intermediary. The role that the dealer pays for a specific financial company, thus attracting potential customers for taking out auto loans.
Often the marketing policies adopted by the financial companies affiliated with the retailers provide for the granting of zero-interest auto loans. The possibility of using the buyback option is also frequent. The solution which provides, at the end of the loan, for the dealer to buy back the car.
Another widely used reimbursement formula is that which provides for the final maxi installment. In this case, the repayment of the credit takes place with an amortization plan structured in monthly installments of a reduced amount, with a maximum installment at the end of the repayment.
But why apply for car loans in the dealership? The main advantage is practicality. In this way, in fact, the buyer has only one interlocutor, unlike what would happen if he first requested a loan from the bank and then turned to the dealer.
Auto interest rate loans are finalized loans which are characterized by the possibility of paying a car in installments but without interest. The zeroing of the TAN has in most cases the raising of the APR as the main cons. However, there are also situations in which both values are reset.
In these circumstances, we are faced with a case of real zero-rate financing.
Fiat car-free loan: here are some tips
Auto zero-rate loans are chosen by numerous car manufacturers. Fiat is also one of the most famous brands that give customers the opportunity to opt for these loans.
Any examples of zero-interest auto financing on this? Let’s focus on the case of the purchase of the New 500 Vintage ’57, on sale at a promo price of $ 12,800. In this case there would be 60 monthly installments of $ 225.44 each, with a zero TAN and an APR of 2.26%.
Mercedes car zero-rate loans: what alternatives?
For Mercedes vehicles, one cannot speak of real zero-rate car financing but, thanks to the credit institution belonging to the group, it is possible to take advantage of particularly advantageous TANs.
Among the many examples in this regard, we can mention the plan for the purchase of a Class A DrivePass, a car that you can become the owner of by paying an advance of $ 4,900 and paying 35 monthly installments of $ 215 each.
This loan is characterized by a fixed TAN of 5.90% and an APR of 7.44% (the sale price of the vehicle, plus VAT, is equal to $ 22,041).
Ford car zero-rate financing: all the information
Even in the case of Ford, we cannot speak of effective zero-rate car financing, but of a much cheaper TAN compared to other loan proposals for the purchase of vehicles.
Let’s take a specific example by analyzing the case of the purchase of the Mondeo Tit. 2.0, a car whose sales price, including VAT, is $ 31.975.
The car can be purchased against an initial loan of $ 5,150 and with a payment of monthly installments of $ 490 each (TAN and APR of 3.95 and 4.76%).
Zero-interest rate car financing: what does Volkswagen offer?
Volkswagen, on the other hand, proposes an effective zero-rate financing formula. We are talking about the product TASSO ZERO VERO, which allows the purchase of different vehicles of the brand, such as the Golf Variant and the Golf Sportvan.
Customers who choose this method of financing can repay the amount received in monthly installments of between $ 100 and $ 200. Let’s take a specific example regarding the purchase of Golf 1.6 TDI Highline BlueMotion.
For this car, there is a plan consisting of an advance payment of $ 21,600, followed by the payment of 50 monthly installments of $ 100 each, with TAN and APR zeroed.