Car loan – pros and cons

The intention to buy a car, of course, involves the need to have funds for this purpose. However, we don’t always have our own savings, and it can be hard without a vehicle nowadays, so to finance your car, please visit 24/7 Savings Bank. Banks that offer car loans come to the rescue here. It is a special-purpose loan, i.e. the funds obtained in this way can be used only for the purchase of the vehicle. But it doesn’t have to be a car. As part of the car loan, we can buy any vehicle with an engine. So we will also include motorcycles, scooters, agricultural and construction equipment, and even motorhomes. Before you decide to take a car loan, it’s worth learning its basic pros and cons.

 

Advantages in a car loan

Advantages in a car loan

A car loan is a relatively cheap loan if we compare it with a cash loan, for example. This is due to the fact that the bank applies additional security measures related to the car being purchased and this minimizes its risk. However, we must reckon with such forms of loan collateral as: registered pledge, transfer of ownership and assignment of rights from auto insurance. The loan period for a car loan is up to 10 years for a new vehicle. If we buy a used car, this period will definitely be shorter. However, using these maximum 10 years we can spread the loan repayment into favorable installments tailored to our own financial capabilities. The amount of car loan depends on our creditworthiness and is assessed individually for each client. The final amount may be in the order of even several hundred thousand zlotys.

 

Defects in the car loan

car loan

The collateral required by the bank can be considered the main disadvantage of a car loan. Autofasco insurance is also obligatory, the full cost of which is borne by the borrower throughout the entire loan period. However, if the car is stolen or damaged, the insurer will pay compensation to the lender and not the borrower. At the beginning, the list of formalities may be discouraging. At the bank, we will need to provide your ID card, driving license, income and employment certificates, as well as the documents of the vehicle you intend to buy. So, before you start arranging a car loan, you must have a specific vehicle model selected and a sale and purchase agreement signed.