Today, most people take out a loan when they purchase a new car. Belgians have long since made it no problem to buy an installment car. There are therefore various options for doing this. The traditional installment loan, 0% financing, balloon contracts, etc. Yes, the car industry is also reinventing itself regularly to ensure that the turnover does not decline. What is the most interesting type of car loan? What is the cheapest car loan? And what should you pay attention to?
Borrow at 0 percent
Admit it: an interest rate of 0 percent sounds tempting. Consumer organizations, however, point out that anyone who is seduced into this type of loan must pay attention. After all, in practice it appears that with such loans the car dealers no longer give an (extra) discount on the car or suddenly pay considerably less for taking over the old car. If you look at the total picture, a 0 percent loan can even be more expensive than a 5 percent loan. Moreover, it appears that these loans offered by garages and car manufacturers usually have a shorter duration compared to a so-called traditional car loan. So calculate well what is the most advantageous in your case.
With a balloon contract, the monthly payment is a lot lower than with a traditional loan, but at the end the consumer still has to cough up a large sum or buy a new car from the same car brand with similar financing. Not really something that everyone is waiting for. Sometimes the consumer can choose to return the car, but the dealer can refuse this if the car is not properly maintained or, worse, damaged. In general, balloon contracts prove to be more expensive in practice than a traditional car loan.
The classic car loan
The classic car loan thanks to its interesting interest rate, among other things, it is the most popular form of financing for purchasing a new car. The repayment period can run up to a maximum of 120 months and you will have to pay off part of the capital, including interest costs, each month. Because the car serves as a guarantee in the event of non-payment, the interest rates are relatively low. With most car loans offered by credit institutions you can borrow more than 100% of the purchase price to, for example, pay the insurance and registration costs or the road tax.
This type of loan is offered by just about every bank and lender in Belgium. It is therefore important to investigate. Comparison is the message. Fortunately, you no longer have to leave home for this. Nothing as easy as surfing the internet at home and calculating car loans, for example. Just about every financial website has a simulation tool. The simulation tool allows you to calculate the monthly repayment for the amount you want to borrow with the number of months you want to pay off. In no time you have an amount on the screen, that is your fixed monthly fee to pay off your car. That amount also includes costs. Also view the general terms and conditions and the annual percentage rate. And above all, stay within your budget. Borrowing costs money.