Getting a car isn’t always for flaunt. Sometimes, people get cars for their jobs, which makes it an asset rather than a liability. The need for having a car has risen these days as people are employed in jobs that are far from their homes. Rather than taking public transportation, which sometimes accounts for being late to jobs and getting inconvenience, riding a private vehicle is fast and convenient. For those people who want to earn from driving, getting a car is the most plausible way.
However, there are times where we need to buy a car, but we are financially incapable. It hinders convenience and punctuality, especially among those who have to take transportation to get to their workplaces. To provide for those who want to own a car, financial institutions and lenders offer installment loans.
An installment loan is a type of loan where lenders, companies, and banks lend you money for a particular purpose. The money that you borrow is added with an interest that you must pay in regular payments. Such regular payments are called installments. Installments, depending on the agreement made by the lender and the borrower, may come monthly, bi-monthly, or weekly.
The period that you have to pay the installment is based on the amount you have to pay as an installment. The larger the amount you pay as the regular payment, the shorter the time you have to finish your loan. The smaller the amount you pay as the regular payment, the longer the time you have to complete your loan. If you have a stable and more-than-enough income, you may want to opt for the former. However, if you have no steady income, stick with the safer and less risky choice —the latter.
CreditNinja loans provide types of loans that offer reliable financial support and low installment rates that come with an easy borrowing process and no hidden fees. Such a company offers installment loans in the form of mortgages, personal loans, and car loans. As the name suggests, car loans are provided to potential borrowers who want to own a car through installments.
A car loan is a type of installment loan where a lender lets you borrow money to buy a car. The cash lent is then added to the agreed interest and divided into a series of installments that you should pay in the agreed period. The car bought by the borrower becomes the collateral for the said loan. If the borrower fails to pay the installments, the lender can repossess the car and may sell it to gain back the money lent.
Where can I get it?
You can get a car loan directly from a financial institution, such as a bank or a credit union. If you already have an existing relationship with the union or the bank, it might help in securing a better rate for your loan. Borrowing money directly from a financial institution also means avoiding extra fees, such as going through a middle man or other third parties.
If you want to get the car immediately and you’re okay with paying extra fees, you can always opt to get a loan through an auto dealership. The auto dealership gives you the convenience of a one-stop-shop. If you want a faster transaction, you will be getting your loan and your car in the same place, which gives you the advantage of completing the process of loaning in a day. You can also choose your lender as some dealerships offer you different lenders. This prompts them to present exclusive deals to get the loan out of you.
As I said, the immediate transaction would cost you extra fees. This is because the dealership works as a middleman for the loan between you and the lender. To compensate for the arrangement of your loan, the dealer will likely charge you more than the loan costs. That is what makes the transaction fast but expensive.
Understanding gap insurance
After you have bought your new car with the car loan, a must-have insurance that you should get for your insurance policy is the gap insurance. If worse comes to worst and your car got stolen or totaled, your car loan will continue to exist. Your car insurance will then pay you the actual cash value of your car, which is still less than what you still owe the loan.
Gap insurance covers the gap between the actual cash value and what you still owe. This means that you won’t have to pay the remaining payments of a car that you do not have anymore.
Whatever reason it may be, getting a car should be a reality for many, not a dream that they may never reach. With careful planning and maintaining a stable income to pay for the regular installments, you can have full possession of your car after fully paying the loan. Convenient transportation becomes within reach if you know what you’re dealing with.