Getting a bank loan or personal loan from a building society or bank can help raise finance if you want to buy a car. It is also a cheap way to borrow money because you can easily get a good rate, but you should know that bank loans and personal loans are different names that serve different purposes.
You can make use of a personal loan for a down payment on a car, whether the car is a used one or a new one; the choice is yours to make. One more thing you should know is applying for personal loans affects your credit in return.
Personal Loan For Down Payment On Car
We stated earlier that applying for a personal loan would affect your credit, and this is because the lender giving you the money would have to check if he can trust you to pay it back. This is why it is advisable to use an eligibility calculator to check the impact of personal loans on your credit rating. You should check the monthly repayment amount and the total amount to end up with an affordable option that would not cost you so much when it comes to paying back.
Taking a personal loan for a down payment on the car has its own advantages and disadvantages. Take a look at some of its pros and cons;
Pros Of Personal Loan For Down Payment On Car
- It comes with fixed interest rates, but it is advisable for you always to check because they might vary sometimes.
- Taking personal loans is one of the easiest ways one can finance the purchase of a car.
- Getting a personal loan can be gotten face to face, through the internet, or over the phone
- You can take a person to make up the money to purchase the car or make the entire purchase.
- You can select a preferable loan period but remember that the longer the loan period, the longer you have to pay up its interest rate.
- Getting a personal loan for down payment on a car means you already own the car while working to clear off the loan debt, and this means if you run into financial difficulties, you can end up selling the car.
Cons Of Personal Loans For Down Payment On Car
- Its monthly payments might be higher than other forms of finances, but this depends on the costs and terms.
- You would need to be patient for the money to be made available, although some lenders would make money readily available.
- Getting a personal loan for a down payment on the car means not getting any advertised rates.
- Since you bought the car by taking a personal loan, you are one hundred percent responsible for all of its repairs.
- There is a possibility that you might end up borrowing more money than you intended.
You can own a car through a personal or bank loan, and you can buy through a dealership or privately because as long as the money is already in your account, it can be treated like it is your own cash.
It is also necessary that you make use of a loan calculator to figure out how much you would need to pay each month and how long it would take you to pay off the amount you want to borrow when you finally decide on taking a personal loan as a down payment on a car. Compare different loan rates and lengths as well.
Cooling Off And Canceling Period
After taking a personal loan, there is a period known as the cooling period, and this is a period of fourteen days where you have to think whether taking a personal loan is the right move for you and if, after having these thoughts, you are not convinced that you need the loan then you can go ahead and cancel it.
Canceling during the cooling period means that you owe the interest and capital built up within the short period of time you took the loan, and this money needs to be paid back in about thirty days.
Canceling the loan doesn’t mean that the agreement you have to get the car from the dealership should be canceled as well. It simply means that you have to look for some other means to purchase the car you want.