Car loan – the most important information
There is a growing interest in brand new cars that Poles decide to buy. They are rarely funded for cash because banks offer great deals. Check how to get a car loan on attractive financial terms.
Every second Pole has at least one credit commitment, including car loans. There is no wonder – in this way you can become the owner of a brand new vehicle, which is distinguished by its trouble-free operation and remains under the manufacturer’s warranty. The choice of financing, however, cannot be accidental, because the difference between the most expensive and the cheapest loan offer can amount to even at least several thousand dollars in the whole financing period.
What is a car loan?
Wondering what a car loan is? This is an external form of financing that allows you to buy a vehicle straight from the salon, spreading the payment into monthly installments. This solution is very beneficial because it does not contribute to excessive budgeting – the installment amount is adjusted to the borrower’s financial capacity.
Depending on the bank’s offer, you can get a car loan not only for new vehicles. Some institutions also finance used cars, but under strict conditions.
How to get a car loan – step by step formalities
To apply for a car loan, you have to complete many formalities – some of them are similar to any other financing, e.g. cash loan.
A must is:
- submitting a correctly completed application,
- presenting financial documents,
It is also important to meet specific conditions set for the borrower. They include, among others:
- borrower’s age,
- achieving stable income,
- high creditworthiness,
- good credit history.
The formalities do not end when the bank issues a positive credit decision. It is necessary to make appropriate payments – in accordance with the applicable contract. It is all about making an own contribution, which is a certain percentage of the value of the vehicle.
Car loan with collateral
You already know how to get a car loan. So let’s learn about the types of security used by the bank. This is a standard procedure – especially in the case of relatively low own contribution. This is perfectly understandable because the banks provide financing for quite high amounts.
Depending on the institution’s internal policy, the following types of collateral are possible.
- Assignment of rights from AC policy
The assignment of rights from the AC policy protects the bank in the event of unforeseen fortuitous events involving the vehicle being credited. If there is total damage or theft to the car, the bank – and not the borrower – receives compensation paid by the insurer.
- Registered pledge
The consequence of the registered pledge is that the bank obtains priority over the possibility of satisfying its claim from the credited car. In practice, this means, for example, taking ownership of a car if the borrower stops paying off the liability.
- Transfer of ownership as security
The essence of the transfer of ownership as security is the transfer of ownership of the vehicle to the bank. As a result, the lender becomes a co-owner of the car – this fact is confirmed by an appropriate entry in the registration certificate. After repayment, the bank transfers full ownership to the borrower.
It is worth emphasizing that this type of collateral is most often used by funding institutions.
Car loan – why is it worth it?
You know what a car loan is. Time to think about the profitability of such financing. Although incurring a liability requires you to repay the loan amount plus interest, you may want to consider this option.
There are many arguments in favor of a car loan:
- possibility of maintaining financial liquidity – the monthly installment is adapted to the material situation,
- no unforeseen costs – the borrower pays a monthly commitment in the amount set out in the loan agreement,
- the possibility of financing new and used vehicles.
This kind of financial support helps to build a good credit history. This may be useful in the future, e.g. when taking out a mortgage, etc.
Are you wondering how to get a car loan while minimizing the risk of rejection? Take advantage of the knowledge and experience of experts from Copy Lender Bank. Specialists provide substantive support at every stage – from choosing the best credit offer to paying off the last installment.
You can also use a consolidation loan if you pay several liabilities at the same time. By combining multiple installments into one and receiving additional funds, you also have the chance to buy a new or used vehicle. Loan consolidation with additional cash allows you to systematize your loan obligations and to close your home budget. At Copy Lender Bank, we specialize in consolidation loans, so we’ll help you get financing tailored to your needs and financial capabilities.