When you think of buying a car and search for a car loan, you will find a wide range of options available in the market. However, you need to carefully choose the loans to match with your financial plans. In order to get the best option available, you will need to carry out a good research so that you will be able to clearly understand the pros and cons and then select the one that is best for you. Below mentioned is a brief explanation that will help you to make a decision regarding your car loan.
PCP or the Personal Contract Plan
These are the ones that are arranged through the dealers and these options allow you to pay the deposit upfront. There are several options given to you at the end of the loan term. There is an option to pay the total amount outright at the end or you have the option to give back the car to the dealer. In the PCP the benefit you get is of the lower payment terms. The benefit is the lower repayments per month, but the drawbacks are that if you are not able to follow up with your car maintenance and servicing requirements then you will need to pay the final balloon or the amount regardless of whether or not you want to keep the car. Another drawback that you have here is that the interest rates are high on the loans. So the benefit is low monthly repayments, and the drawback is the balloon that you need to payback at the end. So when you carefully consider your requirements then you will be able to get the right loan.
HP or the Hire Purchase
Since this is one of the most popular loan options that people go for, you will surely be aware of this or may have heard about this option. Most of the experienced dealers in the field of car selling arrange the HP for their customers. In most of the cases there is an option to pay the upfront deposit, but the advantage here is that there is no balloon payment for the loan. The benefit of this is that as soon as you finish the loan payments, the car will be immediately yours. When you carefully research about the options available in your area and the options given to you by the dealers, then you will be able to get loans with good rates and good terms of prepayment. With this you will be able to get affordable options and easily buy the cars of your dream.
The Personal Loan
If you are not able to find the deals in the above mentioned two options then this is the last resort for you. This is easy to avail but it should be last on your list of things to do for loans. You will immediately get the personal loans but then you also need to pay more in the long run. So one of the best things to do in this regard would be to check with your car dealer about the available options in your area and then finally get the one that suits you the best.
When applying for the car loan, don’t just look at the amount being sanctioned to you but also the duration and also the interest rate that you will need to pay in the long run. Although, it requires some research and efforts in the initial stages but you will be happy in the long run as you will be able to save money on your car loan and get the option that is affordable for you and suits your pocket.