When it comes to taking out a car loan, the advice you are given is to take the time to compare the offers. But how to proceed and what are the criteria to be taken into account to recognize an advantageous proposal?
Some tips to help you decide and borrow according to your real needs and your repayment capacity.
In online simulations, you will compare auto loan offers based on the loan amount and the repayment tenure. To find the cheapest car loan, choose the one with the lowest annual percentage rate (APR).
However, take the time to read the prior loan offer carefully and find out about the services offered by the credit organizations. If some allow the repurchase of credit and the monthly report, others will avoid you any excess to prevent overdrafts and this type of service necessarily has a cost.
To find the right car loan, you must know how to determine your immediate expectations and prevent future needs. So, start by choosing the type of car you dream of buying and determine your debt ratio which should never exceed 33% of your monthly income.
If your repayment capacity allows, you can turn to a new car and choose the make of the car, the type of engine and the options yourself while benefiting from a manufacturer’s guarantee which will reassure your lender who will grant you an advantageous interest rate provided you subscribe to a car loan contract assigned to the purchase of the vehicle and which automatically cancels the loan if delivery has not been made.
However, if you cannot afford to buy new, it is always possible to opt for a used vehicle that will cost less, but the interest rate will be higher because the bank will have a doubt about the real value of a car of which it knows neither the history nor the real state.