Almost half of all new car purchases are financed by a loan. With a conventional car loan, the buyer pays monthly installments until the car is paid in full. The term of the loan determines the amount of the monthly amounts that have to be paid to the bank. Read more at http://www.northwestmetropolitans.com/car-loans-and-bad-credit-best-car-loan-lenders-for-bad-credit-online-application/
But that’s classic car financing. In the meantime, some new car buyers are moving to balloon financing. With this type of financing, you also pay monthly installments, which, however, turn out to be lower. At the end of the loan term, the remaining amount is paid in a final installment. Depending on how high the down payment and the monthly installments were, a larger sum can come together.
The pros and cons
With a new car loan with a final installment, there are advantages, but also disadvantages. The big advantage is the low installments that have to be paid to the bank every month. This is certainly a good alternative for households with limited financial scope. But the big end usually follows at the end. Many car buyers say that it will take a long time before the final installment has to be paid. But time flies quickly and suddenly you don’t know how to raise the final installment.
However, the dealer banks are smart and immediately offer follow-up financing. In plain language, this means that a new car with a final installment can also be financed by a loan. Interest is naturally incurred for this, which makes the new car even more expensive.
Apply for a loan from a direct bank
Direct banks have a big advantage that the dealer banks cannot keep up with. They offer lower interest rates. The terms and purpose are also freely selectable. Instead of applying for a new car loan with a final installment, car buyers should better contact a direct bank. Long terms can also be selected here, so that the monthly charge for financing the new car is not so important. This type of financing also has a very big advantage. You save money again, because the car buyer acts as a cash payer and benefits from the discounts that are still granted when paying in cash.
The performance of direct banks is often underestimated. They have advantages that no car dealer can offer. In terms of terms, they offer more flexible options than the retail banks. In addition, free repayment options are offered. The loans can thus be structured according to the personal needs of the borrower. This is hardly feasible with a new car loan with a final installment.
The comparison sums it up
There are so many direct banks that it is difficult to find the right bank quickly. But there are comparison computers on the Internet for that. If you enter the relevant data, such as the loan amount and the term, you will quickly receive the relevant information about which bank offers the best conditions. The loan can be applied for directly online. A payment does not take long and depends on how quickly the papers are back at the bank. Within a few days, the money is in the account and the car buyer can do without a new car loan with a final installment.