Not everyone can afford their own vehicle without financing . Therefore, a car loan is often used. This is an earmarked installment loan . It can also be used to finance motor vehicles, such as the conversion or repair of a car or motorcycle. Both new and used vehicles can be paid off with the car loan . The car loan enables you to acquire your desired vehicle in a timely manner, even if you have not saved the necessary funds . In our comparison calculator you can find car loans at attractive conditions .
Installment payments for car financing
The repayment of the debt is made in the car loan in monthly installments. These always include the same amount and include in addition to the repayment and the accrued interest . The characteristic of this type of loan is that interest is calculated on the remaining debt . As a result, the share of interest rates decreases, while the repayment increases – so the rates can always remain the same.
In order to reduce the total costs, you should invest your own money. As a result, the loan amount decreases, the term is shortened and as a result, you have to pay lower interest rates. This also applies if you give your old car in payment at the dealer.
Collateral for the lender
If you take out a car loan , you must submit the last three proofs of income together with the contract. Also, bank statements usually have to be submitted to prove regular payments on the account.
In addition, many banks demand the deposit of the vehicle registration document (vehicle registration certificate II) for a car loan. Ownership of the new or used car is also transferred to the bank by means of a vehicle letter and the signing of a transfer by way of security . This reduces the risk of default: If a payment default occurs, the vehicle can be utilized to pay off the remaining debt with the sum achieved. After the full repayment of the loan amount, the car letter will be returned to you and the ownership of the vehicle will automatically return to you. If the bank waives the document, you must provide a copy of the purchase agreement as proof of purchase.