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For
a majority of people, the biggest aspiration next
to owing a home, is owing a car. In today is times,
living without a car is almost unimaginable almost
impossible. But although owing a car is imperative,
buying one outright is not possible for most. There
a plethora of options to finance you car purchase
these days.
The biggest advantage of opting for car finance
options is that it enables them to enjoy the convenience
of a car without having to save up and pay upfront
for the same. There are plenty of attractive car
finance schemes on offer from various financers.
In case of most finance schemes, you can work out
to your maximum benefit.
The different types of popular car finance schemes
include -
Hire Purchase
The traditional method of financing you car purchase,
where in the vehicle is basically hired and the
you repay the cost by making regular monthly repayments
until the cost of the car has been fully covered.
Pros
- You own the vehicle at the end of the term
- Rates are usually low
- Minimum deposits are generally from 10%
- The total amount paid as interest is low compared
to other options.
Cons
- Your car acts as the security for the loan, hence
if the repayments are not made regularly, there
is a risk that the car may be repossessed.
Personal Loan
A popular loan, you can avail of a personal loan
to fund your car purchase. Financers, dealers and
car sellers make their commissions while they arrange
the finance for you. So enough time shopping around,
compare the rates and decide on the lowest one available.
Pros
- Relatively easier to arrange
- Competitive rates
- As the loan is not secured on the car, you are
free to sell the car and transfer the loan. - Also
the car cannot be repossessed because of the reason
mentioned above.
- The total amount of interest tends to be lower
than in the case of other options
Cons
Monthly repayments could be relatively higher than
some other finance options.
Mortgage extension
This is one option that can offer you a very low
monthly payment, the downside being, you will have
to keep repaying for perhaps as long as 15-20 years(probably
more than the life of the car itself). Even if the
rate is low, since the repayment period is so long
that at the end, you end up paying much more as
credit charges.
Pros
Low interest rates
Smaller monthly payments
Cons
- Loan is secured on your house, as it is an extension
of the house mortgage
- As the time period is too long, you might have
to pay for the car probably even long after you
have stopped using it.
- It is complicated and costlier in the long run.
Other useful information
Unsecured personal loans are a popular way of raising money whereby you are not required to put up property as collateral.
Today loans are available even to purchase used cars. Used car loans can help you buy the car you always wanted to own.
Unsecured loans are for people who do not have property or asset to offer as a backing for the loans.
Interest-only loans are for people who do not want to pay heavy instalments every month on the sum borrowed, but pay only the interest initially and clear off the capital in one payment.
If motorcycles are you passion and owning one such machine your dream, then motorcycle loans can help turn your dream into reality.
Badly in need of cash? Cash loans may be your answer, whether it’s an emergency, unexpected expenditure or any situation where in you are in need of cash.
Having credit problems does not mean that you can never ever avail of personal loans any more. There are bad credit personal loans to bail you out.
Debt consolidation loans can help you consolidate you multiple debts under one head, making it easier to handle the same.
In the process of buying and selling a home, you may find yourself in a situation where you don't have the requisite money in hand at your hour of need, this is when bridging loans come to you aid. They take of the time and help you bridge over.
Consolidation loans help compile all your debts under one loan and relieve of you the problems related to managing multiple loans.
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