Would you like to buy a new car? Under certain circumstances, this can be quite expensive. So you may decide to take out a loan. You then still have a few decisions to make, such as whether you want to finance part or all of the sum – and whether you are considering leasing.
Online loan comparison for your new vehicle is certainly a good first step. In the case of a car loan, there are two different financing options in addition to leasing.
Also called 3-way financing: a mixture of leasing and installment loan. You only pay comparatively small installments, but at the end of the term you have to pay a large part of the remaining amount at once, like a balloon that bursts at the end. Hence the name.
The advantages of balloon financing lie in the low rates, the high flexibility (the driver only has to decide at the end of the term whether he wants to keep the car or pay the rest of the amount in leasing installments and surrender the car again. Disadvantages often lie in this that interest rates are often high and the loan cannot be redeemed early.
The installment loan
The interested party calculates what amount he needs. From this, of course, he subtracts the share that he can raise through equity. Then the required sum is calculated in installments.
Advantages of the installment loan method are that a high completion rate is not necessary and that the car is entirely yours after all the installments have been paid. The main disadvantage is that the monthly installments could be very high.
In the case of a car loan, it is advisable to take it up online
So you are considered a so-called “cash payer” in front of the car seller and can appear very differently, which gives you a higher level of seriousness. The car dealerships and dealers often advertise with cheap offers, for example zero percent financing, but in the end you often do worse than online financing, so take a close look and calculate the interest.
If you have decided how you want to proceed and what amount you need, you can use a comparison calculator. It is advisable to look for a car loan right away and not for a normal loan.
You then enter the loan amount in the computer, determine the term, specify the purpose (eg whether new or used car), compare the offers, wait for the evaluation, submit the requested documents – and buy the vehicle.