Get a car loan today with bad credit
Despite high discounts, the purchase of a new car or a high-quality used vehicle represents a major financial burden that only a few consumers can manage from their savings alone. If you do not want to lease the new vehicle, you can choose between different loan types, consumer loans and special car loans are particularly often used. The advantages of a car loan today with bad credit from compariloan.com are convincing because the customer can benefit from a high level of security and low-interest rates.
As with any other loan, a credit check is carried out before a car loan is granted. The customer’s personal data, such as the amount of regular income and current financial obligations, are used to check whether he is likely to be able to repay the borrowed money without any problems. In addition, credit institutions generally also obtain information from the credit bureau. If there are no restrictions on the creditworthiness from the evaluation of this information, the car loan is paid out.
Unlike a consumer loan, a car loan is always earmarked and can therefore only be used for the planned purchase of the vehicle. Another specialty lies in the collateral that is usually required for car loans. The vehicle registration letter serves as real security for the financing bank. If the debtor is in arrears, the bank can then immediately sell the car and use the proceeds from the sale to repay the loan. The advantages of a car loan result directly from this protection: on the one hand, higher loan amounts are possible than with unsecured consumer loans, on the other hand, no high-risk premium is required so that the interest on car loans is relatively low.
An installment loan or a balloon loan for car financing?
If you want to take advantage of a car loan, you can either take out an installment loan or opt for the so-called balloon financing. With an installment loan, the repayment is made in consistently high monthly installments. In addition to the interest due, these always include a repayment component that increases over time because the loan amount to be interesting is continuously reduced. Balloon loans have also been offered to customers more and more in recent years. These are final loans in which the principal repayment takes place at the end of the term.
The rates are very low throughout the credit period because they usually only include interest. The advantages of a car loan in this form make it possible to take out large loan amounts for high-priced vehicles even with relatively low income. However, it must be accepted that the interest charge is significantly higher than with a car loan, which is repaid in equal installments.