Car Finance Loans: Where to Start
|
|
Posted On :
Aug-24-2011
| seen (602) times |
Article Word Count :
601
|
|
When it comes to buying a new or used car, there are many different types of finance available to consumers, however, these can be confusing if you don’t know where to start. Depending on your budget and your particular needs, there will be a loan suited to you.
|
|
When it comes to buying a new or used car, there are many different types of finance available to consumers, however, these can be confusing if you don’t know where to start. Depending on your budget and your particular needs, there will be a loan suited to you.
The first type of car finance loan is the Unsecured Personal Loan, which is based solely on your ability to make the repayments. The monthly repayments and loan length will be fixed, and no assets will be used as security for the loan.
Should you wish to borrow a larger amount, you might consider taking out a Secured Personal Loan. This type of loan usually allows for lower monthly repayments over a longer period, however, if you cannot keep up with the repayments then your assets (e.g. car, house) may be repossessed.
The third type of loan is Personal Contract Purchase, known as PCP, which allows the consumer to pay a deposit and lease the vehicle for a fixed time with lower monthly repayments. The difference is, however, that a final payment, sometimes called a balloon payment, is calculated at the beginning of the loan and is based on the future value of the vehicle. There are usually three options – pay the balloon payment and keep the car, hand the car back and walk away, use the guaranteed value as a deposit for your next car. It’s important to note that you don’t fully own the car until the balloon payment is made.
The final type of loan is Hire Purchase which allows you to buy your car over a set period with fixed monthly payments. An initial deposit may be required, and you only own the car once the last payment has been made.
When it comes to buying a new or used car, there are many different types of finance available to consumers, however, these can be confusing if you don’t know where to start. Depending on your budget and your particular needs, there will be a loan suited to you.
The first type of car finance loan is the Unsecured Personal Loan, which is based solely on your ability to make the repayments. The monthly repayments and loan length will be fixed, and no assets will be used as security for the loan.
Should you wish to borrow a larger amount, you might consider taking out a Secured Personal Loan. This type of loan usually allows for lower monthly repayments over a longer period, however, if you cannot keep up with the repayments then your assets (e.g. car, house) may be repossessed.
The third type of loan is Personal Contract Purchase, known as PCP, which allows the consumer to pay a deposit and lease the vehicle for a fixed time with lower monthly repayments. The difference is, however, that a final payment, sometimes called a balloon payment, is calculated at the beginning of the loan and is based on the future value of the vehicle. There are usually three options – pay the balloon payment and keep the car, hand the car back and walk away, use the guaranteed value as a deposit for your next car. It’s important to note that you don’t fully own the car until the balloon payment is made.
The final type of loan is Hire Purchase which allows you to buy your car over a set period with fixed monthly payments. An initial deposit may be required, and you only own the car once the last payment has been made.
|
|
|
|
Article Source :
http://www.articleseen.com/Article_Car Finance Loans: Where to Start_76339.aspx
|
|
Author Resource :
Before agreeing to any loan, always check the total amount payable over the loan period. Car finance loans can be confusing so make sure to do your research and shop around for the best deal before signing any contract.
|
|
Keywords :
Car finance loans,
Category :
Business
:
Marketing
|
|
|
|
