With the installment loan to the dream carThe most popular form in Austria to finance a motor vehicle is the installment loan, also known as consumer credit or small loan. A Installment credit is available for amounts between 1.000 and 75.000 Euro awarded. It has the following advantages:
– Lending even for small amounts. Well plannable due to fixed interest rates. A fixed number of monthly installments. – Easy to finance due to low monthly installments. – Maximum term of only 84 months or. In rare cases 120 months. – Apart from a salary confirmation, no collateral required. – Some banks no longer require a transfer of ownership as security. – Usw.
Even if only relatively small sums of money are usually required for a car loan, you should still compare the available offers from lenders with each other. The Differences in interest rates can be significant, so that with the right choice you can save one or the other euro in the end.
Paying cash at the dealership
The great advantage with this car financing is that you can appear before the dealer like a cash payer. If the seller can count on the whole amount instead of a down payment, he is usually willing to sell the car to the customer at a lower price. Ideally, the discount is so high that you recoup the cost of the interest. How to save cash.
The advantages of the car loan compared to leasing
In Austria almost every third car is leased. The system is simple: you pay monthly installments like a kind of rent and at the end of the term you have the option to buy the car for the remaining residual value. Compared to leasing, buying a car with a loan has significant advantages:
– You are the actual owner of the car from the moment you buy it, whereas you are not the owner when you lease it. – With leasing, you do not own the car, but you still bear the risk. – When buying through a car loan, you are not bound to any contractually agreed mileage, d.H. There is no mileage limit. – You are not obliged to take out comprehensive insurance, nevertheless it is absolutely recommended, at least for the first few years. – There is often the possibility to make an early repayment. – It does not have to be taken out with a partner bank of the car dealer. You are free to choose the bank with which you want to make a financial commitment.
Sign the loan agreement, buckle up and off you go!
Financing with a car loan is not uncommon. Many people take this option, because the banks usually offer fair conditions and the offers are clear and customer-friendly. Even if you have no previous experience with taking out a loan, you do not need to be afraid of it. The short terms and low monthly amounts can be planned well. Nevertheless, you should inform yourself in detail about the current options before taking out a loan and compare the respective conditions with each other so that you can get the best out of your loan and thus also out of your car.
More information
A car loan is a loan with which a private person finances the purchase of a car. The car loan is usually repaid in regular monthly installments, including interest, over several years. It is suitable for anyone who wants to buy a car, but cannot pay for it all at once. Since the car loan usually has to be repaid over a small period of a few years, there is no high risk associated with it. Many people lease a vehicle rather than finance it themselves through a car loan.
But this is not necessarily the cheaper option. Similar to real estate, you own the car after the loan has been fully repaid. This means that you can dispose of the car as you wish and also sell it. All this is not possible when leasing a car. A leased car may only be advisable if you know that you will only need the car for a short period of time or to bridge the time until you can pay cash for your own car.
Where to take out a car loan?
The car loan is a special form of credit, which is often offered by banks as a special form of credit. Some banks have subsidiaries that deal exclusively with car loans and car leasing. Some credit institutions work closely with certain car manufacturers. Some car manufacturers have their own financing banks. They offer the car purchase. The car loan right away as a package. It is also possible to take out a car loan directly with the car dealer. Overall, the interest rates on the car loan, unlike the real estate mortgage, are rather favorable. Because often the car loan is an important argument to be able to sell the car at all.
Repayment in monthly loan installments
The most common form of car loan is a down payment followed by pre-agreed monthly installments over an equally pre-agreed period of time. This makes the car financing transparent for the buyer. In addition, he can adjust to what costs are incurred monthly. Another way to finance the car through a car loan is balloon financing. Here, too, there is a previously agreed monthly installment payment during a certain period including down payment. However, the down payment is not made at the beginning but at the end of the credit period.
Some people then sell their car to be able to finance the final installment. To be able to take out a car loan, one must offer securities. The most important security for buying a car, as well as for all other loans, is a regular income. The car itself can also serve as security. In addition, life insurance policies or savings are considered as collateral for the granting of a car loan.