Joint car loan bad credit -Do you have bad credit but need a car loan?
Cars have been a regular part of the landscape for years. They allow you to move between any points, travel on smaller or further distances and give you a sense of freedom and independence. In recent years, the popularity of the car has definitely increased. This is well illustrated by the fact that parking lots in cities and by shops are full, a common problem of traffic jams and heavy traffic on many roads and streets for most of the day and year. These are side effects that every driver must be aware of and be prepared for.
Do you have bad credit but need a car loan?
The car has become an extremely common mode of transport in recent years. Every year, more Poles decide to buy it, choosing from extremely diverse offers. In some cases, you may need financial support to cover the purchase costs. What bad credit car loan should you choose and is it worth it to make such a commitment at all? Let’s Look more info for bad credit car loans.
The use of means of transport is an inseparable element associated with living in today’s world. It doesn’t matter if you live in a small town, medium-sized city or large metropolis. It is difficult not to face the necessity of using a bus, tram or train today. Many also cannot imagine life without a slightly more personal and equally popular means of transport – a car.
In addition, owning a car also involves quite extensive additional costs. In order for it to fulfill its function as long as possible, the user must remember about expenses for fuel, servicing and repairs, insurance and inspections. And while owning a car can sometimes drain the pocket, millions of consumers in Poland are still willing to pay the price for the benefits of the car. Especially when, because of their place of residence, work or lifestyle, they simply need them to live.
The car market currently offers a huge field of choice for the consumer depending on his individual circumstances. You can choose from small and large cars, slower and faster, more or less economical, cheaper and more expensive, used and new. Finding the optimal offer for yourself can sometimes take months, and many consumers try to prepare for it in the best possible way.
An important criterion is, of course, the price. Many buyers set a specific budget to buy a car. They accumulate the desired amount from their savings, but sometimes it may turn out that the moment of purchase of the car can not wait any longer. The consumer may also want to buy a new car whose value he will want to pay back in the long run. Then, it may be beneficial for you to use the bank’s financial assistance. A car loan is a popular offer.
What is a car loan and what documents are needed?
A car loan is, as the name implies, a financial commitment given for a specific purpose by the bank. After verifying several factors, about which the bank will allocate a certain amount of money to the consumer in a moment. He undertakes to finance the purchase of a given car (or another motor vehicle), as well as to repay the borrowed amount in the form of regular installments. Their amount is determined in advance, and all details of the principles and costs of the loan are concluded on a special agreement.
To obtain a loan for a car, a bank that has such a service on offer may require the following parameters.
- Presenting your ID card and driving license as a basic confirmation of your identity and driver’s rights.
- Adequate creditworthiness. The bank will check based on information available in, among others in the Credit Information Bureau (BIK), as the financial history of the consumer is presented. Based on these entries, you can check whether loans, payday loans, and other bank loans have been repaid regularly. The BIK will also find out whether the consumer has any possible arrears. If it is demonstrated that the applicant for the car loan is the debtor – the bank may reject the application.
- Current financial situation. Similarly to other loans, the bank will also check whether the potential borrower has permanent employment. The amount of income will be assessed, as well as the type of contract regulating the employment relationship and the duration if any. It will be necessary to prove that the cost of other obligations, expenses for your monthly needs and any other dependents will not make repayment difficult.
- Own contribution. As in the case of a mortgage loan for the purchase of real estate or a flat, a borrower planning to buy a car may in some cases be required to pay his own contribution. It is the amount constituting the percentage of the car’s value determined individually by the bank. Suppose, when buying a car worth $ 95 thousand, the bank may require a down payment of e.g. $ 20 thousand. It is a form of additional security for loan repayment and the credibility of the borrower. When own contribution may be necessary? About this in the following section of the text.
What types of car loans exist?
One type of liability does not have to be hidden under the term car loan. Banks often offer this type of loan in three available forms, which are often tailored to individual consumer preferences.
- Standard loan. This is the most traditional form of a loan, which consists of regular repayment of principal and interest installments at the repayment time specified in the contract. Installments must be paid regularly (monthly) and a pre-determined amount.
- One-time loan. This is a loan for which it is necessary for the consumer to make a specific contribution of a certain amount. For the remaining value of the car, the consumer is required to pay a one-time amount for which the loan will be repaid. Of course, it will be added to it, among others commission and interest, which are a source of profit for the bank.
- Balloon loan. This is a form of loan that involves paying installments at a relatively lower amount. Their total value is, let’s say, 70% of the value of the purchased car. The remaining amount is payable by the consumer with a one-off payment of money.
How do I apply for a car loan?
A car loan is a service commonly seen in the offers of banks operating in Poland. With a desire to obtain such a commitment, it is worth making sure, however, whether a car loan is certainly offered by a given bank. Information on this can be obtained through the bank helpline or during a visit to a stationary bank outlet. It is worth adding that commercial banks do not have a monopoly on car loans. However, this applies to the topic of new cars that you want to buy at an authorized point of sale.
There are car brands, such as Volkswagen or Toyota, which have their own banks offering the possibility of obtaining a loan to buy their dream car. Then, for information on credit and the terms of such a transaction can be obtained during a visit to the salon, where we want to buy a car.
Before you decide on a specific car loan, it is worth assessing whether, for example, the bank’s offer in which you have an account is by chance less attractive than another competitive bank or car brand bank. The key information that should be an indicator of the attractiveness of a given loan should be the interest rate and commission charged to the obligor. These costs have an impact on how the loan amount will increase by additional fees to the bank that grants it to us.
Car loan – advantages
When presenting information about a car loan, it is also important to divide the most important information about it into pros and cons. First, let’s learn about the strengths of a car loan.
- The possibility of choosing different repayment methods. Depending on the consumer’s preferences, he may choose a one-time loan repayment with own contribution, balloon installments or a regular loan divided into equal installments.
- Long loan period. There is another advantage of the information mentioned above. The consumer often has the option of spreading the loan into convenient installments spread over the years. Therefore, the loan may not be an extremely costly commitment on a monthly basis.
- It is possible to finance the purchase of a car, both new and used. The consumer may eventually need funds not only to buy a car from the salon but also from a second hand. Banks can grant commitments for various types of vehicles, although you have to remember the age limit – commitments for vehicles older than 10-15 years are reluctant.
- Lower cost than a cash loan. In the case of car loans, banks demand additional collateral. However, this may result in lower loan costs, i.e. an additional amount of money that will have to be paid back by paying the commission.
- High loan amount. A car loan can be granted even for expensive, luxury cars, the value of which exceeds the ceiling of $ 100-150 thousand. Whether or not it is allocated obviously depends on the creditworthiness and financial situation of the consumer.
- Credit building. Taking a loan for a car can also bring far-reaching benefits. Remembering about diligent and timely repayment, the consumer is building good creditworthiness for the future. Thanks to a future entry in the BIK about regular repayment, usually such an expensive commitment, the bank can look more favorably at the consumer when he wants to obtain e.g. a mortgage.
Car loan – disadvantages
For balance, you cannot forget about the disadvantages of car loans and for some consumers, they can prove to be significant inconveniences.
- Additional security is needed. If you borrow money to buy a car, the bank requires additional security from the consumer. Most often they take the form of entering the bank in the car’s registration certificate as a co-owner. This is called assignment in the form of a registered pledge, thanks to which the lender in the event of failure to pay installments may take over the car and sell it, thereby compensating for the loss of proceeds from the loan installments.
- Obligation to purchase an AC policy. Although buying private Autocasco policy is a voluntary option for private customers, the bank may require the consumer to take out such insurance compulsory for a car loan. Please note, AC covers the cost of any theft or destruction of the vehicle. The consumer is obliged to pay premiums or take out a policy once. In the case of the above mentioned fortuitous events, which entitle to obtain compensation, it is transferred to the lender – the bank.
- Extended time to complete the formalities. Generally, you need a lot of formalities to get a car loan. In addition to an ID cards, certificates and income. and driving license, the bank also requires, among other photocopies of the vehicle card and registration certificate. In addition, a purchase contract and even a court certificate of no entries in the pledge register.
Loan for the purchase of other vehicles
Although the name of the described commitment may suggest that it was cut only for classic passenger cars, in reality, it is different. Car loans can also be obtained by those who intend to buy other means of transport. Depending on the bank’s offer, the following vehicles can be purchased under this loan:
- Delivery vehicles, motorhomes,
- Motorcycles, scooters, quads.
- Trailers, semitrailers.
- Agricultural vehicles (tractors etc.), construction vehicles (e.g. excavator).
Is it worth buying a car on credit?
Summarizing. Taking a car loan, as in the case of any other bank liability, brings certain benefits and disadvantages. It is up to the consumer how they will respond to them and how they will assess their weight. There is no doubt, however, that a car loan is noteworthy financial support in a situation where, for various reasons, we do not have free funds to buy a given car. Remembering a diligent and timely repayment, it allows you to enjoy your dream vehicle while building good credit standing.