Purchasing a vehicle by cash is quite an impossible thing for many to do. Auto loan provides the much required funds to consumers and helps them purchase a vehicle of their choice. You can get auto loans from private financers or institutions like banks.
You could pay back the borrowed fund in installments as agreed granting money. It is very convenient and flexible method. There is provision of using an existing property, usually a current vehicle or your house to be used as collateral. It is also convenient to re-finance an existing loan.
The range of choosing a car loan is huge. There are many websites through which BPI auto loan rates can be enquired and compared. Numerous types of loans can be compared having lowest rate of interest, flexibility, easy documentation and quick processing.
Auto loan calculators can be found in abundance to help you evaluate your monthly capacity for repaying the loan. The figures can be formulated on your own. For instance take the principal amount of your vehicle, add sales tax to it and subtract down payment. The answer received is the amount you should have every month to give to the lending institution. Later on do consider the interest rate imposed by the lender and the terms of the loan.
The amount paid each month is the same, but most of the initial payments will be a part of the interest. The payment of principal amount usually comes towards the end. Monthly payment can be easily calculated by multiplying the values of remaining balance and the monthly rate of interest.
Unlike principal amount paying interest is slightly annoying. While choosing a lender its best to be alert regarding the interest rates offered. If you have already taken loan from a financial institution and have good score, you may be granted discount.
How to Apply for the Loan?
There are certain pre-requisites to be fulfilled before an auto loan is applied for. You are asked to provide the lending institution a list of things and they are as follows:-
- Your name
- The number of your social security
- Date of birth
- Address of the current and previous stay and the duration
- Present and past employers and the tenure of employment
- Income source
- Monthly income
- Information regarding current loans and debts.
There is a process through which the loan application goes through which does not happen overnight. These details help the probable lenders enquire about the borrower’s current credit score and evaluate the application thoroughly.
Why should this Loan be Taken?
The positive sides of taking the loan are:-
- The car once dreamt of can now be owned.
- Budget is not pushed much.
- The cost can be spread over a long period of time and lets you enjoy the convenience of flexibility.
- The current car, though bought through loan, can be used as collateral for more loans.
- Free gas can be availed without any additional expense.
- The loan has got free insurance that comes along with it for a year.
The loan is definitely a good idea to opt for. The car loan calculator helps in taking the decision fast and efficiently.