nedjelja, 30. prosinca 2012.

Avail Car Loans to Drive Your Dream Car

Every one of us would have a dream of driving a sophisticated car. Many of us would not afford to do due to the shortage of money. Car loans are granted to overcome these financial difficulties. Like any other purchase loan purchase also has to be carefully chosen after an extensive research. The pleasure of driving your own car with the beloved beside is the most pleasurable moment of any person’s life. Automobiles market in general and car market in specific is always kept engaged by introduction of new models each day. Inspired by the new models many of us like to either update our existing car or like to buy a new one. Even with strong inspiration and desire many of us do not make to buy a car due to the economic constraints. At such situations car loan is only choice to fulfil our dream. When the loan is wrongly chosen with wrong dealer, the whole pleasure of owing a car will not be sweet. To help people choose the best loan available in UK this article explains the different types of car loans.
Like many other loans car loan also have certain requirements that are to be fulfilled to get a loan. The requirements changes with loan providers and the type of the loan chosen. The general requirements are the following. A borrower must be above 18 years of age and must be a citizen of UK with a permanent income. Employment ID is demanded by most of the lenders as a proof of employment and the person must be working with the employer for at least 2 years.
Different Type of Car Loans
Secured loans- these loans are usually given against a property like home or land. Collateral is pledged to the lender for loan money and the lender takes advantage of the collateral if the money is not repaid on time. As collateral is pledged the lender is certain about the repayment and hence large sum of money can be borrowed. The interest rate and monthly installments are usually kept low to benefit the borrowers. These loans are long term loans, people who cannot afford to repay immediately can choose this type of loan.
Unsecured loans do not demand any sort of collateral for the loan money. People who do not want to pledge their properties or people who do not have properties to pledge can make use of this loan.  The loan amount depends on the person’s repayment ability and the interest rate is comparatively high than in secured loans. The high interest rates are for the risk that the lender takes for the loan amount. The loan tenure is usually for short period and the monthly installments are fixed and cannot be altered without penalty. Here the car belongs to the borrower and he can sell his car any time, but he has to still pay the monthly installments for the loan tenure. Choosing a flexible plan may offer flexibility in repayment tenures.
Personal contract purchase is where the borrower pays a large sum of money, usually 25-30% of the car’s original retail price as a deposit and leases a car for a fixed time period. After the initial deposit monthly installments are also paid to the lenders for a period of 3 years or more depending upon the agreement.  After making the final settlement which is also a large sum the borrower can own the car if he wishes to.
Hire purchase is another type of loan which is offered by car dealers and manufacturers. The borrower is required to pay a large sum of money as initial deposit followed by the monthly installments. The higher the initial deposit, the lower is the monthly installment. Before selling the car it is mandatory for the borrower to repay the amount fully.