The purchase of a new car is not always possible without the use of credit funds. Not everyone can afford to pick up a car from the showroom or choose a compatible model and immediately pay the full cost out of their own savings. Therefore, payment by installments or credit is becoming more and more popular.
And if an official dealer can provide an installment plan of up to 12 (rarely 24) months, then the loan can be repaid to the bank within 3-5 years.
But when choosing a loan to buy a car in 2022, the borrower faces an equally difficult question. Which option to choose: personal loan or car loan? Consider the possible options to evaluate all the advantages and disadvantages of each solution.
Types of loan to buy a car in 2022
Currently, banks offer two main financial products that will help you buy the car you like:
- Car loan : Which is provided in the halls of official dealers when buying a new vehicle. You can also apply for a car loan in 2022 at a bank branch to buy a used car. You will be presented with a number of requirements, subject to which the banking organization will approve the transaction.
- Personal loan : In this case, the financial institution issues funds for a longer period. And there are no restrictions on the vehicle.
Each of the loan options above has its positives, but there are also a number of negatives. To make the right decision on a car loan, experts recommend carefully studying this topic and carefully evaluating the advantages and disadvantages of each financial product.
To the attention of the consumer in 2022, lenders offer types of auto loans such as:
- Classic car loan
- Loan taking into account the car handed over under the trade-in system.
- Concessional loan.
- Express clearance.
- A car loan obtained with only two documents.
- Interest-free lending.
- Buy back.
- Car loan for a used vehicle.
- Car loan without a CASCO insurance policy.
In 2022, banks offer various types of car loans. Having carefully studied the offers of several large financial institutions, the borrower will easily select the best type of loan.
Conditions for obtaining a car loan in 2022
There are a number of specific requirements that the bank raises regarding the borrower. Without clear fulfillment of all the conditions, it is impossible to become the owner of a car loan in 2022. Therefore, to get a car loan, the borrower must:
- Be over 21 years of age at the time of signing the contract with the bank and under 65 years of age at the time of the return of the last payment.
- He/ She must be a citizen of that country from where he/she is taking the loan.
- Must be officially employed and must have worked for at least 4-6 months.
- Must have minimum 1 year total work experience.
- The income level must be average or above average and the amount of free cash per month is sufficient to pay off the loan.
- Prepare the necessary package of documents. Includes passport, income statement in bank form, driver’s license. Each bank presents certain requirements for a package of documents. Therefore, the borrower must pre-check with the selected organization the list of necessary certificates and documents.
In addition, certain requirements are put forward for the car. For example, when buying a used vehicle, its age should not exceed 5-10 years. In addition, the lender can request the results of the diagnosis of the car and, based on the data received, make a decision on granting a loan.
The borrower is forced to leave the newly acquired vehicle as collateral until full payment of the entire amount of the car loan debt. Therefore, it will not be possible to sell or donate a car until the debt with the bank is paid.
Benefits of car loans
To find out which loan is best to take to buy a car in 2022, experts recommend evaluating the benefits of each type:
Having carefully studied all the offers of lenders, the borrower easily selects a financial product with the most suitable conditions for him.
Disadvantages of car loans
When choosing a loan to buy a car in 2022, it should not be forgotten that each type of car loan has a number of disadvantages. Consider the restrictions that a borrower will have to face when choosing a financial product.
What is better- a car loan or a personal loan?
- Personal loan : A personal loan is much easier to obtain, often requiring no more than two documents. At the same time, collateral and guarantors are not required from the borrower. However, the rates on such a loan will always be inflated, and in addition, you will not be given the opportunity to take advantage of one of the preferential programs.
- Car loan : The advantage of this program is the dealer’s promotions, in addition, the client has the opportunity to take advantage of the state subsidy program. However, until the loan is repaid in full, you will not be the full owner of the vehicle, since it has been a pledge for the bank all this time. In addition, the registration of a car loan provides for the execution of various insurances, not only for the car, but also for you.
Which banks offer the best car loans?
- SBI Car Loan
- Axis Bank Car Loan
- Bank of Baroda Car Loan
- Federal Bank Car Loan
- Canara Bank Car Loan
You can also independently create a schedule for future payments on a car loan or calculate the possibility of its early repayment. Perhaps at this time such a loan is too burdensome for you. In this case, try to save money to buy a used and therefore cheaper car.
There are a lot of great deals on the used car market these days.