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Installment Loans

Installment loan for car purchase

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Installment loan for car purchase

 

The dream of owning a car requires a long time of saving. If you don’t want to do without your mobility for this time, you can use an installment loan to buy a car. There are several ways to get an installment loan for buying a car. Almost every automaker now works with a partner bank. For the car buyer, this means that they can get the loan straight away in the car dealership. Some manufacturers even advertise with interest-free loans when buying a new car. A comparison with the second option is definitely worthwhile here.

The way to the dream car

The way to the dream car

This option means getting yourself a loan on the credit market and then acting as a cash payer at the car dealer. With the choice of the second option, every car buyer can end up driving cheaper than with the loan mediated by the car dealer. There can be several reasons for this. On the one hand, the dealer has to hand over part of his commission to the bank for very low-interest loans for his customers.

This can limit the car buyer’s negotiating scope when it comes to the purchase price. If the car is a used car, it is even more interesting to take out an installment loan for the car loan from the house bank or an online bank.

Experience has shown that the conditions here are more favorable than with a loan that is brokered by the car dealer.

Balloon rate or constant high rate – the financial scope decides

Balloon rate or constant high rate - the financial scope decides

With an installment loan for buying a car, the buyer can basically choose between two different types of financing. On the one hand, a loan contract for constant installments can be concluded during the entire term of the loan. The vehicle is paid off at the end of the credit period. The monthly charge for the borrower is the same for each installment. Alternatively, the borrower can also take out a balloon payment at the end of the term. This form of financing is particularly popular when buying a car.

The advantage for the borrower here is the low monthly charge, since the monthly rate is far lower than in the first variant. This option is particularly attractive for low-interest loans. The borrower can save on the balloon rate throughout the loan term without being exposed to unnecessary costs. In addition, due to the low monthly load, he remains flexible with regard to his budget planning.

In the case of a higher interest rate, the first variant may be more recommendable. In this case, the repayment of the loan amount is higher each month and therefore less interest accrues over the entire term of the loan.
Ultimately, the individually offered terms and budget of the borrower decide which installment loan is best for the car.

Dollar mortgage loans will virtually disappear from the market. Is this a big loss?

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Dollar mortgage loans will virtually disappear from the market. Is this a big loss?

The number of new loans that are denominated in USD is steadily falling and dollar products are no longer counting. The fate of loans settled in the Swiss franc was sealed in April last year. Further editorial at bahnlinz.com

It was then that the last domestic bank withdrew them from its offer. One of the reasons for such a dramatic decline in the popularity of foreign currency mortgage loans is the regulations of Fine Bank.

The GFI has been thinking for some time that such products should become even more niche.

Banking supervision will soon achieve its goal by introducing the same currency requirement for loans and income generated (see point 6.1 of the amended Fine Bank). This restriction will affect almost all wealthy customers …

Offer only for selected ones

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The new regulatory plans of the Fine Bank have not influenced the offer of loans settled in USDs for the time being. Such products are still included in the information materials of eight banks (see the list below).

Seven lenders have been foreseeing additional restrictions for a long time, which effectively discourages most interested customers.

The most popular solution is the minimum income limit. In the case of the most liberal Good Credit Bank, it is over twice as high as the average net remuneration (USD 5,660). Fine Bank and Good Credit predict a limit three times higher (USD 15,000).

The black bowler bank also requires an income in the currency of the loan. An identical restriction is also applied by two other lenders: 

After the introduction of the amended Fine Bank, the requirement for a single currency for the loan and income generated will apply to all mortgage loans.

USD mortgage offer: requirements of domestic banks

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Bank

Requirements

Across Bank

the borrower’s minimum income is USD 15,000 net

loan available only to users of the Private Banking service or persons who earn an income of USD

Fine Bank

the minimum income per family member is USD 15,000 net, for single persons the limit is USD 10,000 net

Honest Bank

the loan only available to applicants who earn an income of USD

Agree Bank

the borrower’s minimum income is USD 12,000 net

Instant Care Bank

the minimum household income is USD 5660 net of tax

Binary Lender

Spin Lender

The loan is only available to people who earn an income of USD

Across Lender

the minimum household income is USD 10,000 net

 

Attractive interest as compensation …

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The low cost of raising capital is an asset that partly compensates for the poor availability of the products in question. Data from the Fine Bank indicate that the average interest rate on housing loans in USDs is 3.2% (data for November 2012).

The corresponding value for contracts settled in the national currency is more than twice as high (6.9%). What do you think Is it worth applying for a currency loan?