Few people can buy a new cash car, so most do it with financing. But in that case, which is better: a personal loan or an auto loan? We explain to you!

What is the best option to buy a car?

It is suggested that the best option is to go directly with the agencies, because they can give the best rates, in some cases up to 0% at 18 or 24 months.

What is the difference between an auto loan and a personal loan?

Automotive loans are a variation of personal loans, based on depreciation or the value of the car over time, and are the most recommended option if you are going to buy a car, since Promo Suzuki Ertiga are designed to absorb the value of the car specifically, in addition, that in some cases they can offer additional advantages to the user, for example, include free car insurance.

In most cases, they require a substantial down payment, known as a down payment. The higher the first deposit you make, the following monthly payments will be lower. For most auto loans, a guarantee or guarantee is required, and many of them are subject to review your credit history.

Meanwhile, personal loans can be with or without collateral, although they are also subject to credit history. And the money they grant may not necessarily be used to purchase a vehicle.

What to take into account before buying a car with a credit
Rate the best credit to buy your car, taking these aspects into account before accepting financing:

1) Credit payments

Check how much you will pay monthly and for how long. Online calculators can help you know the scenario you will face in the future, with your monthly payments. Never accept the commitment without knowing the impact it will have on your pocket.

2) The credit interest rate

The interest is the extra you pay a lender in exchange for it to finance your car.

The calculation of interest rates on auto loans is based on a list of car prices and your current financial situation.

Personal loans tend to have a higher interest rate than auto loans, but they can be reduced in the case of secured loans. Ask the advisor to make examples of your credit in scenarios of a simple interest rate over a compound interest rate.

3) If you want to buy a new car or a used car
Most car loans are focused on new cars or have a property certificate. When you search for the car you wish to purchase, review the different loan alternatives that apply to your case.

In the case of a used car, maintain close contact with the original owner to ensure that credit is an option for the transaction. If you plan to buy an older car or if there is no credit option, consider the alternative of requesting a personal loan.

4) Your credit history

If you decide to look for a loan for a significant amount (for example, to buy a car) it is very likely that any financial institution you approach will check your credit history. This ensures that you have the economic capacity to make your payments in a timely manner.

If you have a “stained” or null credit history, you will have little chance of getting an auto loan and it will even be difficult to apply for a personal bank loan. However, you could try to negotiate an alternative directly with the lender, depending on your case; or, consider other types of loans (such as immediate ones) that tend to be more flexible, although the amounts they finance are much smaller.

A golden rule: do not acquire new debts before paying the oldest ones.

Author's Bio: 

TM root is a passionate blogger