Is a personal contribution required to take out a car loan?
If the personal contribution is not an obligation to take out a car loan, it is on the other hand a serious boost to reassure your banker and obtain the best car loan rate .
– Car credit with contribution makes it easier to apply for a loan and reduces the total cost of your loan.
– It is possible to obtain a car loan without down payment, but the conditions are more restrictive and the cost higher.
– To take out a loan without down payment to finance your vehicle, use an online simulator or use a broker.
– Thanks to your personal contribution, you have the possibility of negotiating the terms of the contract. Compare the amount borrowed, the repayment period and the interest rate applied to make the best choice.
Personal contribution: a plus for an auto loan
The credit organization or banking establishment always studies the financial profile of the individual who wishes to buy a car through a car loan. But when it comes to consumer credit, and particularly auto credit, it is also welcome to have a personal contribution . Whether it is a few hundred or several thousand euros, the auto loan with deposit is recommended.
The personal contribution for a car loan has the advantage of providing an additional guarantee to the banker : the borrower demonstrates his ability to save. You can also build up your starting funds using the proceeds from the sale of your old vehicle
Define your personal contribution for your car loan
The personal contribution reassures the financial advisor in charge of granting the car loan. However, you must ensure that this contribution does not jeopardize your financial situation. This would be counterproductive and completely unnecessary. The car loan with personal contribution is generally taken out when the price of the car is high and it cannot be fully financed by a traditional car loan. But the acceptance of your loan request also depends on your current credits and your monthly household expenses .
Before taking out a car loan with a contribution and reporting a personal contribution for the purchase of your car, it is therefore recommended to start by calculating your repayment capacity. Take stock of your overall expenses and see what savings you have left at the end of the month, which will allow you to assess the right amount of a personal contribution for a car loan. .
Is it possible to obtain a car loan without down payment?
Taking out a car loan without down payment is entirely possible since it is not a systematic condition, provided you limit your requirements. Indeed, lending institutions can grant credits without personal funds, but the conditions are less advantageous than for a car loan with contribution.
Limited choice of vehicle or options : the amount of credits granted is limited and your monthly payments must not weigh too heavily on your budget. You will therefore be forced to turn to vehicles with reasonable prices, such as used cars.
Longer and more expensive repayment : your loan will cover 100% of your costs, which means that the repayment period will be long. In the end, with interest and the cost of insurance, the cost of your car will be much higher than the amount of the simple car loan.
Higher monthly payments : for a car loan without down payment, banks apply higher interest rates, since these are riskier borrower profiles. After calculation, the monthly payments are high or for a long loan period. Except that in the case of a used vehicle, it is not very profitable.
How to take out a car loan without down payment?
Car credit with contribution is not the most frequently chosen solution, since many households cannot provide equity to finance their vehicle, or the repayment capacity and the debt ratio do not match the amount necessary. To find the best deal, use an online credit simulator . You can also use an auto loan broker.
