Car loans are very functional and helpful when you desperately need a car for you or your family and you do not have necessary funds to pay for it. Car loans are the debt that you take from the bank when you are not in the condition to afford the full payment of the car in one go. You can also take this loan from the finance officers at the dealership from where you get the car. Well, if you are perplexed the two options of where to get the loan from, it depends on the car loan that has been offered to you. Although there are dealerships that offer you great discounts and promotions on bank loans, the bank financing companies are much better for those who have the record of good repayment to their loans which is termed as credit score. It is advantageous for those having great financial history, although car loans depend largely on great offers, deals and your present financial circumstances.
A car loan with bad credit is taken by the potential car purchaser that lets the buyer an opportunity to pay for the car in terms of easy monthly installments that is often accompanied by an amount that includes the rate of interest that is charged on the loan. In this process, the bank or the lender becomes the temporary and the legal owner of the car unless you do not pay all the EMIs and become a permanent owner. Meanwhile, the user of the car has to remain responsible for the maintenance, repairing and regular insurance of the car. As soon as you pay the total balance, you get the legal ownership of our vehicle and it gets transferred on your name.
Car loans are very easy and it is a sigh of relief for those people who urgently need a vehicle but cannot own one because of affordability issues. Although, it has many other benefits, it comes with few drawbacks as well. Let’s have a quick review on both the sides of the coin:
The benefits of having a car loan is that you can get the car without paying full payment right at that time and the payment gets distributed in the means of EMIs. It helps us to pay for something that we do not have resources for. So, a bank lends you the money and you in return you make the repayments every month for some specific amount of time. It is ideal for people having a fixed monthly pay and it makes your life easier.
Although auto loans are an incredible way to get a car without paying the entire amount, yet the amount of interest that you are charged, becomes a large sum of money that you have to pay in addition to the amount of car. The ownership does not belong to you and it legally belongs to the lender, so this relationship is more like a lease or rent system. You always have a threat of getting your vehicle recaptured to the bank if you are not able to pay at least 3 consecutive EMIs.