What is a car loan?
Auto credit , also called car credit or auto loan, is a type of consumer credit. This is a loan contracted for a purpose: the Anna Kareninament of a new or used car. Not all households have an immediate sum sufficient to purchase a vehicle. The auto loan makes it possible to quickly benefit from the necessary funds for this purchase. In return, the subscriber agrees to repay his credit, plus a defined interest rate from the outset.
Different structures can grant you a car loan: banks, credit organizations or car dealerships through a partnership with a financial institution. You are free to choose the property that suits you best when you apply for a loan.
The conditions of auto credit
Auto loans are granted under regulated conditions:
- Their amount is capped at € 75,000, for at least 3 months;
- The subscriber has a statutory withdrawal period of 14 days.
What are the criteria for obtaining a car loan?
Obtaining an auto loan is not automatic. After applying for credit, acceptance by the organization you choose depends on your situation. To give you a car loan, the organization will evaluate a set of criteria, including:
- Your income (wages, dividends, pension, annuity, allowances, allowances …);
- Your personal situation (composition of the home, owner or tenant …) and professional (fixed-term contract, permanent contract, type of contract …);
- Your debt ratio , your possible other loans.
All of this allows the institution to judge measuring risk and judging your repayment capabilities. If an auto credit can be granted to you, all this information is also used to offer you the most suitable contract for your profile and your situation.
All these elements will have to be proved by official documents. To obtain a car loan, you will be asked to provide a set of supporting documents to build a file.
The different types of auto loan
Depending on your situation and your needs, you can opt for different types of car loans: an assigned credit, a personal loan or a long-term lease.
The appropriated appropriation
The assigned credit, or assigned loan, is a consumer credit specifically dedicated to the purchase of a vehicle. The amount lent corresponds exactly to the amount of the purchase of the car and can not in any case include a part of cash. The assigned loan is formalized upon delivery of the vehicle. If it is not sold, the loan can not begin.
The credit allocated is not very flexible, but guarantees a certain security for the borrower!
Personal credit, or personal loan, is a consumer loan that allows you to borrow a sum dedicated to a personal project, for example the purchase of a car. The amount of the personal loan is determined by the client in agreement with the lender, according to its needs and its ability to borrow. The credit granted may therefore be greater than the amount of the car.
Rent with option to purchase
Leasing with purchase option (LOA), also known as leasing, is often offered by garages and dealers, through partnerships with financial organizations (banks, leasing companies …). This is a consumer credit that allows you to have a car against the payment of monthly payments and with the possibility, if you wish, to buy the car at the end of the contract. If not, the vehicle must be returned.
The composition of the car loan
A car loan is made up of different elements, which make it possible to determine the total amount. The auto credit agreement must mention these various elements:
- Personal contribution : This is an amount that you can invest directly in your project, for example through savings or assisted loans. The more important the personal contribution, the more you will obtain a car loan in interesting conditions;
- Total Effective Rate (APR) or APR (Percentage Annual Percentage Rate): TEG and APR, shown as a percentage, represent the total actual cost of the car loan, taking into account all costs incurred (interest , insurance contributions, fees, commissions, etc.);
- The nominal rate : this is the cost of the loan, but without the ancillary costs, such as handling fees or insurance contributions, for example. This indicator is therefore less complete than the TEG;
- Duration : indicated in months or years, it indicates for how long you will have to repay your loan.
- Monthly payments : they correspond to the amount you will pay every month to repay your car loan. To avoid over-indebtedness, this sum can not represent more than a third of your income;
- Insurance : insurance is not compulsory in the case of a car loan. However, it may be more prudent to buy one, by comparing the guarantees and franchises offered. The insurance adds an additional cost, but can avoid you real financial problems in the event of a hazard. It is not compulsory to take out insurance from the lender. You have every right to turn to another establishment.
If you decide to take out a car loan, be sure to study all of these elements!
Find the best auto credit rate
Finding the best credit is not always easy for consumers. Not only are there many lenders, but in addition they offer offers under various conditions and variable rates, including profiles.
Fortunately, there is a simple and effective solution to find the most competitive and the most suitable car credit for your situation: make a simulation using an online car credit comparison tool! With a comparator like Anna Karenina.fr, you can access in just a few clicks the quotes of different organizations and can select those that suit you best in the blink of an eye. Thus, you save money by finding the most interesting offer and you save time by saving you the reading of the rates of each organization!
Playing the competition is the best way to find a cheap car loan!
How to compare auto credits?
Compare auto credits will only take a few minutes. On Anna Karenina.fr, you fill in some basic information about your project: the type of vehicle you buy, the total amount of the loan, your professional situation … and you access the best offers according to your profile.
All you have to do is to compare the offers according to the elements mentioned above (TEG, fees, insurance, personal contribution or not …) and to select the cheapest car credit agreement depending on your situation!