Did you know that you can get a car loan even in 15 minutes? How much time do individual banks need to process the application and issue a loan approval decision? I checked it out!
You can buy a car for cash, or – if you do not want to spend more money at one time and deprive yourself of savings – you can take advantage of financing offered by banks. One of the options available is a car loan. Find out what you should know about it.
Car loan – definition
I found a simple definition of a car loan on the website of the Central Statistical Office. According to it, a car loan is a loan for the purchase of a new or used vehicle that has a valid registration certificate. The security is an assignment recorded in the registration certificate. It is worth noting immediately that:
- A car loan is a special – purpose product – it can be used to purchase a new or used vehicle (e.g. a car, motorcycle, quad bike).
- The car loan agreement must be in writing and specify the purpose for which the money will be spent (the contract must specify the credited vehicle data, including make, model, year of production, chassis number or fuel type).
- A car loan is associated with a collateral on the credited vehicle .
- What else should you know about a car loan?
- Before the bank grants you a car loan, it will check your creditworthiness .
- You can repay a car loan for up to 10 years (in the case of a used car loan, the loan repayment period may depend on the age of the car. The bank may, for example, credit the purchase of cars not older than 10 years, and the car cannot be older on the last installment date. than e.g. 15 years).
- You can borrow up to 100% of the price of the car you buy. However, you can finance some of the purchase costs with your own funds. In this case, the installment will be lower (because you will take a smaller loan). The interest rate may also be lower.
The difference between a car loan and cash
The main differences between a car loan and a cash loan are that:
- a cash loan is not granted for a specific purpose. This means that you can spend the money you receive on any car,
- you do not have to secure its repayment .
What’s more, if you know what car you want to buy and how much it costs, you can take a loan and start looking for a car. Found a cheaper car? In that case, you can use the financial surplus for any purpose.
The interest rate on a cash loan – similar to a car loan – cannot currently exceed 7.2% per annum.
Applying for a car loan
How to get a car loan? There are several possibilities. You can submit an application for granting it at:
- a bank branch ,
- dealer showroom – you can use this option by financing the purchase of a car in a bank associated with the importer of a specific car brand (e.g. at Toyota Bank Polska),
- car commission .
Online loan ? You can also apply for a car loan online in 15 minutes. In this case, you have time (e.g. 60 days) to find the best vehicle for you and complete other formalities (including invoice delivery to the bank and establishing security).