It was Credither that was the first to lower its rates for a green car loan to under three percent. As a result, you can now take out such a green car loan here at an interest rate of 2.8 percent. For a classic car loan you pay at Credithera 2.95 percent. This applies to a loan of 10,000 euros with a term of four years. OutBank, Melibank and SDE are just above that, some banks and lenders are even more expensive. You have to be careful, because some banks and lenders are completely aloof from this price war and maintain their rates from before the motor show! So if you look out for a loan of 10000 euros over four years, you will quickly gain 1500 euros between the cheapest and most expensive banks and lenders. Nobody should be surprised that interest rates on car loans have reached such a low point. Not only car loans but all other loans are remarkably cheap. As is the case every year around the motor show, it is also expected that interest rates for car loans will rise again after the show.
Extra tips for the cheapest car loan
The question is what to look out for in order to take out the cheapest loan for your new or used car?
- Monthly payment: keep in mind during your search for the cheapest car loan that the lower your monthly payment, the greater the chance that you will be confronted with additional obligations afterwards. Before taking out your loan, check whether you are not required to put an important amount in cash on your ‘cheap’ car loan after a few years. Be sure to check whether you are not obliged to finance a new car with the same bank or lender after paying off your cheap car loan.
- Installment loan: if you are looking for a cheap yet reliable car loan, you can choose between two formulas. Every lender (including the banks) will initially propose an installment loan.
The obligation to pay an advance of at least 15 percent for a loan for your new car was abolished not long ago. However, this does not prevent the lender from requesting an advance.
- Advance payment: even though it is no longer mandatory to pay such an advance payment, it is advisable to pay an advance payment. As a result, you can usually claim a lower annual cost percentage (APR).
- Balloon credit: the majority of car dealers now offer a variant of the installment loan, the so-called balloon credit that is being taken over by more and more banks and lenders. Such balloon credits seem particularly attractive due to their lower monthly repayments. At the end of such a balloon loan, in most cases after 48 months, you still have to cough up an important amount, the famous ‘balloon’. Which formula does your lender use? If no alternative is proposed in the loan agreement, then such repayment applies. In most cases you will be given the choice between paying this ‘balloon amount’ in cash or returning your car and a new fiancier from the same brand. Your ‘old’ car must then be well maintained and certainly not damaged, or the car dealer will refuse to take it over.
- Leasing and renting: less suitable for private individuals due to too expensive. With renting and leasing, you do not pay off the borrowed amount according to a predetermined and strict schedule. With renting and leasing you can pay back ‘at your own pace’. You soon end up in a debt spiral that is extremely difficult to break.
- Competition: there is fierce competition between banks and lenders in the area of car loans. Make good use of it and play this competition to the maximum before you make a decision.
- Free credit: free credit does not exist. When the dealer comes up with a free credit, he may not be paying you a takeover for your old car. Free credit often turns out to be the most expensive.
- MegaLoan: Meanwhile, the interest at MegaLoan has dropped to just 2.95 percent!