Many people finance their car with a loan. You can choose from banks or car dealers. Anyone who is of legal age can take out a car loan from a bank or a car dealer. But what guarantees do banks require for a car loan?
Credit with car as security
Every bank wants a loan secured. With a car loan, the car, if it has a corresponding fair value, is security. Some banks require the vehicle registration to do this, others are satisfied with a transfer by way of security. If you finance your car from a bank, you benefit from flexible terms of between 12 and 84 months. Some banks also offer free special repayment options. It is also important that the buyer can benefit from the discounts if the car is financed through a bank. Car dealers are still giving discounts on cash payments. This would not apply if the car was financed by the dealer.
When financial security is required
A residual debt insurance can also be taken out to secure the loan. Some banks even require this. If there is a case of unemployment, death or incapacity to work, this will pay the installments. If you want to take out a car loan as collateral, you should pay attention to other things. There are banks that offer their customers free special repayment options so that the loan can be repaid early with a car as security. Partial repayments of up to 50 percent once a year are also possible free of charge. A comparison on the Internet is definitely worth it.
What happens if the loan cannot be repaid?
If there is a delay in payment when the loan is repaid, the bank can assert its ownership and move in the car. Every borrower should be aware of this. As with other installment purchases, the goods remain in the donor’s possession until they are fully paid. This also means that the borrower is not allowed to sell the car during the term, unless he has agreed with the bank and settles his loan with the sales proceeds.