We compare interest rates on car loans.

When buying a car, it is obviously interesting to know what interest rate you can get in case you need to borrow money. Especially considering what the cars cost nowadays. For example, if you buy a new car, you can expect that it often costs over USD 200,000. Of course, used cars are cheaper, but they also cost a lot depending on what you want.

Since the costs are so high for vehicles, it will also be important to find a loan with the best interest rate possible, as there can otherwise be major differences in the total price. An advantage here with car loans compared to some other loans is that it is often a relatively cheap loan to obtain when it is the question of a loan with collateral.

How high is the interest rate on a car loan?

How high is the interest rate on a car loan?

It is not possible to give a general answer to this question as there are far too many factors that come into play. Such things that come into play are, for example, what kind of car you intend to buy. If it is, for example, an old car, this can affect the interest rate. Since the duration of the loan, etc., which you wish for the loan has a big impact, it also.

Lenders also often take into account how strong your own finances are. A borrower who makes good money and has large margins in the economy is a safer customer for the lending institutions, which can lead to a lower interest rate for them. After all, lenders’ reaction to a higher risk is to raise interest rates.

It is also a bit different how the different lenders lend when it comes to car loans. But those who use the car as collateral will probably also be cheaper as this gives them security when they lend money. Then, a car is not considered to be as good a security as a house, which means that the loan will not be as cheap as a mortgage.

Who should you borrow from?

Who should you borrow from?

There are slightly different players in the market for car loans and it is not clear in advance which option is best. First you have the big banks that lend money, then the car dealers themselves who can have solutions with any lender and lastly there are some smaller players in the market.

Where you can find the cheapest price between these we can not say here. One moment it may be cheaper to take an offer from the car dealers, for example in the next moment it will be more expensive to borrow from them. The big banks are often quite stable in terms of price which often makes them nice alternatives.

Other ways to borrow money for a car

Other ways to borrow money for a car

Probably the best option when it comes to loans for a car is a mortgage. This may sound a little strange at first glance, but it is quite possible if you already own a home. If this is not fully mortgaged then it is possible to raise the loan on this property instead of taking a whole new loan. Since mortgages are generally cheaper, this would also be better from an economic point of view. Then of course it is obvious that you just own a home that you can borrow more on, but if this is the case.

Furthermore, you can always take a private loan to buy a car. It is even true that some lenders use private loans to lend money to cars even though they call this a car loan. The interest rate will probably be higher, but it can still be an alternative if you would not be able to borrow otherwise.

Home Loans And Interest

Many are aware that the cheapness or cost of a loan depends on interest rates. Of course, the story is not that simple, but the numbers are sure to answer a lot of things. So we did a little case study that will be instructive for you too, Keep with us!

 

What is Interest?

house Interest

The interest on the loan is the real profit of the bank. This is the amount for which the bank gives us a higher amount of money and undertakes to repay it in small installments during the term of the loan . The lower the interest rate, obviously, the less you pay back on top of the loan taken.

The specific interest rate of our loan is the base rate plus the interest premium. That is, whichever of the two goes up, the interest on our loan will go up and we will repay more.

 

Fixing of interest

Fixing of interest

There is a good opportunity in our hands if we do not want our loan installment to increase. This is called the interest period . This is a period during which interest rates remain unchanged and thus our monthly repayments. It is important to pay attention to this when calculating your loan calculator as well as the monthly amount itself. It is also possible to have the same monthly installment throughout the term, but we know that this will not be the cheapest initial installment. Let’s count a bit!

 

What is the difference in a 1% difference in interest rates?

What is the difference in a 1% difference in interest rates?

If we calculate the interest rate and repayment on a 20-year $ 15 million home loan , we see that 2.48% is the cheapest APR and the related installment is $ 78,466. A total of US $ 19,032,086 will be returned to the bank.

If the interest were 3.48%, our repayment would jump to $ 86,840 . The total repayment amount is HUF 20,841,600. As we can see, this is an extra $ 2 million for us, so we assumed everywhere we would have a fixed repayment.

Well, that’s why it’s worth considering not only the initial repayment, but also the interest and the interest period when borrowing. Contact us for all the little tricks and interesting things! We help you make the most of your credit.

Marital crisis, frustration purchases, debts: why do we make wrong decisions?

Your workplace is not endangered.

Your workplace is not endangered.

Of course, they are involved in political forums and debating clubs to make halfway informed election decisions. Your marriage is not in crisis and your childcare is going well. Your circle of friends is big and interesting. Of course, you only consume within the framework of your monthly budget. Frust purchases do not undermine you. If so: Congratulations. They have their lives under control, process and evaluate all information correctly. But if it creeps up the feeling that reality is slowly becoming the cacophony of a Beijing opera, which unfortunately you can only look at through the peepshow of a peepshow, then you should absolutely read on. What causes you to sometimes confuse the terrain with the map? Making the wrong choices and making decisions that would have been better avoided?

Some explanations: There is the so-called “unconscious”. Most people can spontaneously relate to the concept of the “unconscious” or “subconscious”. Sometimes, however, it is overlooked that information from the subconscious is no longer unconscious once it has reached our actual consciousness. We can not recognize this source of unconscious information then. We can only recognize what information about our sense organs affects us from the outside. And not even with absolute accuracy. What we are played from the inside out, we identify at the moment when it pops up, no more than unconsciously.

On the other hand, we have a strong inclination to look for the essential justifications of a decision only in hindsight. We retroactively rationalize decisions that we have made in reality based on a mixture of completely unconscious emotions and consciously recognized facts. That’s how we are programmed. And that is very good. Otherwise, we could not process the cacophony of the information that pounces on us every second. It would even overwhelm the 100 billion neurons, which are located as a mega computer in the three pounds of protein between your ears.

We decide on patterns. Behavioral economics – as a highly-valued symbiosis of economics, psychology and neuroscience at the moment – has explored precisely these patterns. A little scary is that these patterns are quite predictable. Not all. But so many, that they are describable. All that I can describe and what is repeated with reasonable accuracy, but unfortunately also the clipping pattern for manipulations. However, manipulation is not bad per se. They are only bad if they cause us to do something we really did not want to do and what harms us.

Are we really being manipulated?

Are we really being manipulated?

Are there any leaders who have some sort of secret knowledge? But do not want to announce this, because they fear a mass panic? That would be an explanation. If she did not agree, one would have to assume that we were slowly but surely stultifying. Over 4 billion page views per year on Google. That’s about 120 per user. In Germany. Incidentally, we still buy 400 million books a year. Eleven per German citizen. 18 million daily newspapers are sold daily. By the way, the German spends about four hours a day in front of the telly. (When are we sleeping anyway?)

Let’s jump into the big wide world: Facebook. Facebook likes to give it a headline: “Facebook allows you to connect with people in your life and share content with them.” 750 million people worldwide use Facebook. (According to Mr. Zuckerberg, the founder of Facebook …). Further statistics about the number of sent text messages, e-mails or the use of “Twitter” etc. would just be boring here. So it can not be because we have too little information. As mature citizens or responsible consumers. But why does nothing change? Why are we taking disasters? Why do not we ask further? You’ll hear a lot about that in this book.

First of all, you have to be a saint if you do not honestly acknowledge that, despite your enormous media consumption, neither your world knowledge has improved nor your ability to draw any conclusions from historical events. Conclusions that give you even better prognosis for future events. However, you believe that the next news will bring you the really deep insights. Just as you are constantly trying to quit smoking or really stick to a new diet, drink less alcohol or go to the gym. Next week. Guaranteed.

What are the essential points of a new consumer friendly home loan?

New qualified consumer-friendly home loans are coming to the market in the days that meet the requirements set by the MNB! Banks have been able to apply for certification with the central bank since June 1, and some financial institutions have already successfully qualified. What we need to know about this new form of credit is what we tried to determine in points.

We do, however, recommend the assistance of our credit broker to find the best home loans.

Each of the consumer-friendly home loans includes the following clauses

bank

  1. Annuity is an annuity, ie you have to pay the same amount of installment within the interest period
  2. The interest period is 3, 5, 10 years or the entire term.
  3. The interest rate premium shall not exceed 350 basis points, relative to the reference rate used for the interest rate change index (Percentage point gives the full value of the increase or decrease while the basis point represents one hundredth of the reference rate.
  4. The maximum disbursement fee is HUF 150,000 or 0.75% of the loan amount.
  5. The prepayment fee, this fee, may not exceed 1% of the amount of your faithful repayment.
  6. There is no fee for early repayment from a savings deposit.
  7. The credit assessment time should not exceed 15 business days
  8. The disbursement deadline is 2 business days if the conditions for disbursement are met and the client does not decide otherwise.
  9. If the above deadlines are not met, the creditor will be obliged to waive some of the payment of the disbursement fee.

In 2016, 71.4% of floating rate mortgages provided a premium of less than 350 basis points, while 26.6% of fixed rate mortgages had a margin of less than 3.5 percentage points last year, so it could be considered relatively cheap home loan even in the market.

Independent experts are hoping that rating a consumer-friendly

 

bank

Home loan will also make fixed-rate home loans cheaper, raising the rate so far to nearly 70 percent.
If you look at the totals of the Sergeant Francis Troy home loan calculator, you will find that this percentage is already in the bank offerings.

The aim of the MNB is to achieve interest rate stability, in the current interest rate environment it is necessary to increase the inclination for fixed-rate loans, in the case of disbursements it seeks primarily to give customers access to cheaper fixed-rate home loans.

We recommend our calculator and experts to find the best home loans

If you are interested in the home loan process, details of CSOK, and consumer friendly home loan processes, contact our credit brokerage experts who will provide you with free professional loan information! Fill out the form and we’ll call you back!

How To Improve My Credit Score?

Improving your credit score will not happen overnight. A good score is like walking on the street: you will only be able to run 10km if you follow a training pace for a while.

In the case of your credit score, you will only be able to increase it if you can maintain a good financial record over time. But do not worry! Even those who have not had a very good score today can still start changing their habits and improving them.

Thinking about it, below we will explain to you what is the credit score, what it serves and how you can do to improve your reputation in front of financial institutions!

 

What is the credit score?

What is the credit score?

Credit score is the way that banks and financial institutions have to identify if you are a good payer. That is, at the time you will apply for a loan or financing, for example, they do an analysis of your score to understand how likely you are to honor the debt.

It is a sort of score calculated by Serasa to measure the risk that an institution will incur by giving credit to you. This score can range from 0 to 1000, and the closer to 1000, the better your financial reputation will be, and the more easily you will be approved on your credit applications.

 

What can negatively affect my credit score?

There are some factors that contribute to the fall of a person’s credit score, being:

  • Negative information consisting of judicial foreclosures;
  • Protests;
  • Checks without funds;
  • Search and seizure actions;
  • Participation in bankrupt companies or in judicial reorganization;
  • Annotations of default (banks, credit cards, financial, telecommunications, retail and services).

 

How can I improve my score?

How can I improve my score?

In addition to avoiding any of the problems mentioned above, it is possible to take some small attitudes and changes in your financial habits that will bring about improving for your credit score . But remember: you should keep a “good payer” history, do not just follow these tips for a while. See also:

Pay your bills on time

Pay your bills on time

First, the accounts. Your credit score takes into consideration if you leave too many accounts overdue, so it is important to keep the payment always within the due date. For credit cards, when you can not pay the full amount of the invoice, it is important that you pay at least part of the bill within the due date.

Even remove the oldest debts

After 5 years, it is not allowed to keep the debt negative. However, a debt never ceases to exist. In the analysis of your score it is possible to see if a debt was withdrawn from Serasa because the time passed or because you took it off. Even if she does not present any more risks of taking her name to the SPC, it is important for her record that she be removed.

 

Account in more than one bank

Account in more than one bank

Each bank has some peculiarities when calculating the credit score. Owning account at two different institutions is therefore interesting to improve your score. That’s because you’ll be nurturing a good relationship with both.

 

Use bank products

Investments, credit cards and overdraft are some of the options that can improve your score. Of course, common sense is needed when using these products, but the more you accumulate over time, the better the banks will see you.

 

Shop for credit

Shop for credit

It may sound strange, but the ability to accumulate debts (and pay them of course) is one of the points that positively influences your credit score. Who buys everything in debt or in cash will not have your score influenced. Now, if you have made purchases on your credit card, for example, and paid for it always up-to-date, this will undoubtedly put you at the top of the rankings.

With a good payer history, you increase the likelihood of getting credit, such as an online personal loan that can be requested over the internet without having to leave home.

Mortgage: what are the differences between the Italian, French and German amortization plan?

Not everyone knows that when you turn on a mortgage, you must also pay close attention to the type of amortization plan.

Amortization schedule?

Amortization schedule?

And, the mortgage with the German amortization plan: what is it? Let’s find out all the details in this dedicated guide.

Mortgage loan: which amortization plan to choose?

Mortgage loan: which amortization plan to choose?

Is it better to sign a French or Italian amortization plan? What are the differences? You know when you turn on a mortgage to finance the purchase of a home, you must also repay the mortgage payments monthly, quarterly or half-yearly.

When it comes to the amortization plan, the most common one, the French one , comes to mind, even if it is not the only one.

At the same applied interest rate, the installment consists of a principal and a portion of the repayment of interest expense.

The French amortization plan is characterized by increasing principal amounts, decreasing interest rates and constant installments.

The interest portion is calculated by multiplying the residual capital by the interest rate and the residual capital is calculated by subtracting the principal amount from the residual capital of the previous period.

The capital portion , in the French amortization plan, is calculated by subtracting the interest rate from the constant rate.

As for the amortization plan

amortization plan

It provides for the repayment of the obligation assumed through a capital share constant over time.

Compared to the French plan, the Italian one is characterized by the decreasing interest rate and the constant capital share.

For we understand that this amortization plan is much more advantageous than the French one: the interests are less onerous and the installments become more and more “read” with the passage of time.

And, how does the German amortization plan work? This is a mortgage with deferred interest and capital installments postponed,

The first installment , in the German amortization plan, consists only of interest and is paid in advance with respect to the beginning of the depreciation. The last installment is instead composed purely of the principal amount that constitutes the entire amount of the installment.

For further information contact a consultant of Natty Bumppo and request a personalized estimate.