Different Types of Car Loans You should know
When you approach a lender of a dealership, you may come across terminologies which you never heard in your life. Lenders throughout Canada offer different types of car loans, which come in a variety of sizes and shapes. Due to the amount you have to borrow from the lender, you want to make sure that your financial choice is the right one. Here are four types of car loans you should know:
One of the most common types of car loans in the market is in-house financing, where dealerships will lend you money to purchase a vehicle. The advantage of this type of loan is that it is quite easy to get a car loan, provided you meet the requirements of the dealership. Also, the dealership tries to make the process as smooth as possible, so that you have a great experience. However, the rate of interest is higher than other types of car loans, which is a huge downside.
New car loan
Every lender will ask you to take a new car loan, which allows you to purchase a vehicle of your choice. These types of loans come with different rates of interest, which depend on several factors. For instance, the tenure of the car loan, your credit score, and the size of the downpayment are the ones who determine the rate of interest for your car loan.
Used car loan
Similar to the new car loan, you can only use this one for used vehicles. There are several reasons why you may want to get a used vehicle, instead of a new one. For example, you don’t want to spend thousands of dollars on a vehicle that you won’t use all the time.
Zero down car loan
The fourth type of car loan is the zero down variant, which is quite popular among consumers. When you take this type of loan, you don’t have to make a down payment to the lender.
These are the four types of car loans you should know so that you can make the right decision while purchasing a vehicle!