Find the best deals on auto loans and auto finance options:
Need a car loan? Here's our guide to auto loans and the best auto financing options. Compare auto loans to make sure you get the best deal to help cover the costs of your new set of wheels
1- What is a car loan?
An auto finance loan is a loan that you get for a specific purpose to buy a car. They can be a way to spread the cost of the purchase, although, like all loans, they usually come with an interest rate and any additional fees or charges.
2-What types of auto finance loans are available?
Automobile financing generally comes in three different types:
-Personal loan : One of the options may be to get an unsecured personal loan, borrow a certain amount of money for a specified period, and make monthly payments. This means that you will own the car as soon as the car dealership receives the money - so you can sell the car if you want.
-Hire Purchase: You can also enter into a hire purchase agreement, in which you make monthly payments to the auto finance company while you hire the car from them. After the final payment, you will then be the owner of the car. You usually need to make a deposit. This is usually around 10% of the loan amount, but the more you reduce the loan amount, the less likely your monthly payments will be.
-Purchase of a personal contract: The third option is to have a personal purchase contract. This is similar to buying with rent, in that you put down a down payment and make monthly payments - the higher the deposit, the less likely the payments will be. However, it's also generally lower compared to lease purchases, so instead of paying in full for the new car, you pay its depreciation at the end of the contract. Then you choose between paying the remaining value of the car and keeping it, or returning the car, or entering into a new personal purchase contract and getting another car.
It is also worth mentioning another method that you can use. It is not a technical loan in that sense, but you can pay for the car with a credit card.
The cost of the car should be within your credit limit and you'll need to make sure the monthly payments are paid on time - preferably in full, to avoid paying interest. If you are late with repayment, you could end up with debt that you don't want.
3- Who can obtain a car loan?
You must be over 18 to get a car loan, and lenders often have their own requirements. You can find out more by visiting their website or contacting them directly, by phone, email, or mail.
Note that you should only apply for loans from lenders who are likely to accept you. This is important because a large number of refused loans or credit applications can appear bad on your credit report.
