Cheap car loan wanted? A comparison will get you further!
A favorable kfz-kredit makes the car purchase possible.
According to a study by the CAR center automotive research at the university of duisburg-essen, german car buyers have the following questions in 2016 increasingly relied on new cars from premium brands such as BMW, mercedes or porsche. Around 30 percent of all new registrations came from this segment.
this development also drives up the average price of new cars. Around 31.on average, germans spend 400 euros on a new car. Compared to the previous year, this represents a increase of 650 euro per car dar. In view of the steadily rising prices, it is hardly surprising that more and more buyers are opting for a car loan, to finance the purchase of a car.
On the way to the right offer but there are many pitfalls, to be avoided. What you should look out for if you want a car loan to be as cheap as possible? What forms of vehicle financing are available?? How to best compare car loan offers? We answer these and many other questions in the following guide so that you can be well informed when buying a car.
FAQ: car loan
the classic form is the installment loan, where the loan amount is equal to the purchase price. An alternative to this is the balloon loan and a particularly flexible form is three-way financing.
consider in advance whether you want to take out the loan with your house bank or a car bank. Be sure to compare several offers with each other. Please consider the respective monthly burden that you will have to pay. We have collected further factors for you here.
some lenders grant loans even without SCHUFA. However, you should expect that the conditions will be worse and that the loan will be more expensive as a result. In the following section you will find some suggestions for solutions.
Further advice on car loans
You want to get rid of your diesel? you financed your car with a loan years ago? You may be able to cancel the car loan years later and still get your money back! How can it be? » read on.
Since the diesel emissions scandal, at the latest, many borrowers have wanted to cancel their car financing and return the vehicle. But what is the actual procedure for terminating a car loan and what is the difference between this and a revocation?? You can find out here. » read on.
What options do car buyers have if the credit agreement is faulty or the cancellation policy is incomplete?? Click here to find out when a revocation is possible in the case of faulty car loans. » read on.
Different forms of credit from the bank make the dream of the dream car come true
If you are interested in a car loan in order to finance your new car, you have the choose between different options. Before deciding on one of these, you should discuss the inform yourself in detail about their advantages and disadvantages. The following information is intended to help you make the right choice.
Conventional installment loan – paying off the car step by step
With a classic car loan you pay off the car monthly.
Probably the most used car loan is a classic installment financing. The loan amount corresponds to the purchase price of the car. First you have to make a down payment, the amount of which must be agreed with the lender. In the following monthly installments over a fixed period to pay. If the full amount is paid at the end of the contract term, the vehicle is then finally yours.
Borrowers should be aware that many financial institutions do not offer registration certificate part II – formerly called vehicle title – retain as collateral for the car loan, until the car is completely paid off. If you find yourself in financial difficulties, the last option is often to sell the vehicle. However, without registration certificate part II is not possible and only a few banks agree to hand over the document if the car is sold prematurely. You should consider this before you decide to finance your car with a car loan from the bank.
car loan with final installment: balloon financing
In addition to the conventional installment loan, car buyers can also opt for a so-called balloon loan when financing their new car. This car loan is so called because borrowers must pay a final installment, also known as a balloon, at the end of the term of the contract.
But how exactly does the balloon loan work?? First of all down payment in a variable amount due. However, some lenders also waive a down payment. Subsequently, borrowers then pay monthly installments over a fixed period of time. the higher the down payment, the lower the down payment in comparison. At the very end, in contrast to the normal installment loan, you will then receive a relatively high final installment due.
What is the difference between a conventional car loan and balloon financing?? When comparing the monthly installments, it is noticeable that they are usually much higher for the first option. Since the monthly installments are so much lower with balloon financing, this form of car financing often appears particularly attractive at first. However, borrowers should be aware of the fact that the low installments are only made possible by the usually very high final payment.
in addition, you should note that for such a car loan incur higher interest. The conditions are therefore worse overall. If they pay the total price for a car loan with final installment If you calculate the total price for a car loan with a final installment, you will notice that it is usually higher is much higher than for a conventional car loan.
For those who prefer flexibility: three-way financing
car loan with final installment: if you cannot pay this, you will have to reckon with expensive follow-up financing.
A special variant of the balloon financing, which offers the borrower a special degree of flexibility is what is known as three-way financing. even with such a car loan, there will be flexible down payment made first. Thereafter, monthly installments are due. At the end of the term there are then three different options, to which this form of car financing owes its name:
- payment of the final installment: in this case, it is the already described balloon loan. After you have paid the final high installment, the vehicle is paid off and it is yours.
- Follow-up financing: if you can’t or don’t want to pay the last installment, you have the option of arranging follow-up financing. The remaining amount is then again repaid with monthly payments. However, the conditions are usually much worse than for the first financing.
- Return of the vehicle to the dealer: this is a form of leasing. The dealer takes the vehicle back and the final installment is paid with the repurchase price. If the amount is not sufficient, for example because the car is in poor condition, expensive additional payments may become due.
A car loan of this kind is particularly flexible and is especially worthwhile for individuals, who do not know in advance whether they really want to keep a car after the end of the contract period. Furthermore, as with the balloon loan, at first glance you will be tempted by particularly favorable monthly installments. But here, too, the the total price, taking all factors into account, is usually much higher than with a conventional installment loan.
What to look out for in a car loan?
You can get a car loan from your bank, among other places.
If you would like to finance your new car with a loan, you should do not blindly choose the first offer. Many different factors to consider when finding the right loan for you. In the previous sections we have already explained that there are different forms of car loans exist. The installment loan is the conventional variant, balloon financing entices with low monthly installments and three-way financing can be the right solution for all those who place great value on flexibility.
The following should also be considered, which bank you want to take out the car loan with. With their house bank the term and amount of the loan can usually be negotiated individually. Furthermore, there is an advantage in that you can always get a direct contact person on site have. Direct banks on the internet, on the other hand, can only be reached by mail or telephone, but you will often get offers with lower interest rates. So-called car banks work directly with the dealer. For this reason, they often offer special offers for certain models or special discounts on.
Price for the car loan: interest, term& co
However, when comparing different offers for a car loan, it is not only the points already mentioned that play an important role for many consumers. the decisive factor for the final decision is usually the price for financing the new car. Those looking for offers are usually first interested in the monthly burden of the car loan.
before you take out a car loan, you should calculate the total price of the financing.
How high the installments will be, depends on various factors:
- Loan amount: the higher the amount, the more money you have to budget each month to pay off the car loan.
- term of the contract: the longer the offer, the lower the rates. However, you must expect higher interest rates.
- the amount of the down paymentIf the amount is low, this also means that the remaining amount to be repaid is higher. This has a negative impact on the amount of the installments.
- Interest rates: for the same term and the same loan amount, the installments increase if a higher interest rate is applied. The interest rates vary depending on the bank.
When comparing different offers for a car loan, however, consumers should be aware of the following points do not look at the monthly rates alone. The decisive factor is the total price for financing. This is made up of the down payment, the installments and a possible final installment. Furthermore, in many cases processing and brokerage fees for the bank to consider. Before you decide on an offer, you should check the following calculate exactly how much the car loan will cost you in the end. this is the only way to avoid expensive surprises.
the internet can help you find the right offer for you. Many portals offer a car loan comparison, which you can use from the comfort of your own home compare different providers and loans. Here, too, don’t just look at the monthly rates, but study the terms and conditions carefully.
Car loan without SCHUFA information – is it possible??
As a rule, you can only obtain a car loan if you have a good credit rating.
For people who, due to a low income or financial problems, do not have enough money to pay for an urgently needed new car, a car loan often the only way to finance the purchase of a car. As a rule However, the bank requires a positive SCHUFA report, before agreeing to financing.
SCHUFA holding AG is a company that has collects data concerning the creditworthiness – also called credit rating – of companies and individuals. SCHUFA stores information about this, among other things, when people open a checking account or take out a loan.
For consumers who have already in the past have attracted attention due to a less than optimal payment record, this will be recorded in the SCHUFA information. Even if you file for personal insolvency or if judicial enforcement measures are taken against you, a note will be made.
But what can people do who cannot obtain a conventional car loan because of negative SCHUFA information?? Do you have to bury the dream of a new car?? The good news is: there are certain possibilities that allow affected car loan even without submitting a SCHUFA information to obtain: