Preferential car loans
Posted on Oct 20, 2000 08:15:27 AM
Car loan market is growing rapidly.
Now, almost every able-bodied person can choose for themselves the credit program based on their capabilities and needs. Many banks in conjunction with car dealers offer customers a variety of actions in the form of interest-free car loans and loans without any down payment.
Potential borrower will have to choose from the fact that he is most interested.
The minimum interest rate.
The desire for more opportunities to get cheap credit is irresistible. Given this commitment, banks and car dealerships in addition to standard credit terms often develop joint programs lgotirovaniya interest rates, in certain cases declaring the so-called “free / free loan.”
First of all, want to note that market conditions no one involved in charity work. If a reduced rate, so the automaker or the auto show is interested in stimulating sales. The more so because the correct choice of parameters is to stimulate the cost is quite cheap.
The more the borrower is making its resources and the shorter the loan term, the less car dealers or manufacturers have to compensate the bank. That is why the preferential lending rates imply higher initial contribution from its own resources (at the level of 40-50% of the cost of the machine) and in most cases, the “shortened” term of the loan.
The minimum monthly payment.
In addition to the loan amount and interest rate a significant impact on the value of payments that the borrower is required to make monthly in arrears to the Bank, is lending period. The larger this term, the smaller the monthly payment.
The minimum initial payment.
Today, lending by 90-100% of the car is actually included in the list of standard offerings. That is the man who has no savings, but has a stable job, it may qualify to buy a good car.
Even if the same loan terms (that is equal to the interest rates) the recipient of the loan with zero down payment the borrower will pay more, issued on standard terms. Because loan interest accrued on the outstanding balance.
The borrower will need to demonstrate a greater level of income compared to standard credit terms (after all, as a rule, the amount of payment on the loan may not exceed 40-50% of the declared monthly income). Therefore, a loan with zero down payment may not be able to get if you have insufficient quantity of income. Then we’ll podnakopit initial capital.
Minimum set of documents.
During transient evolution of the auto loan list of required documents, which should give the bank a potential borrower, and so has become quite compact. However, if you want you can get credit by showing only a passport and driver’s license.
Minimum period of processing the loan.
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