Tips on getting a car loan
When buying a new or a used car, you have the option of getting a car loan. A car loan allows
you to pay you car off in relatively small amounts or installments during a
predetermined period of time (e.g. 1 year, 2 years, etc.).
The first thing to take into consideration when thinking about getting a loan is that the car will probably
end up costing you more when paid through a loan. This is due to the fact that you have to pay the interests
on the loan. For example, if you decide to take a loan for € 10,000 (or $ 10,000) and you want to pay the
loan back in 4 years, you might end up paying € 12,000 (or $ 12,000).
If you decide to go for a loan, remember to look for the interest rate (e.g. 6.99% APR). The lower
the better. Have a look at different banks and see what they offer.
Also remember that if you are taking a loan for 4 years you will end up paying more than if you take a loan for
1 or 2 years only. Try to squeeze your payments in the shorter period of time and you'll probably end-up
paying less.
On the Internet it is easy to find a "Loan calculator". Use it to see how much it will cost you to take
a loan over 4 years instead of 2, for example.
Another good practice is trying to get the loan from the same bank where you have your current bank account.
This allows you to build a relationship with your bank. If you manage to pay off your loan
without any problem, next time you get in for another loan (or a mortgage)
it will take a shorter amount of time (and work!) to get it approved.
Until next time,
Giammarco Schisani
*Published the 21st of January 2008
P.S. If you have any suggestions on how to improve this article, please
e-mail me!
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