Buying a car involves serious costs and the need to have personal savings. With the help of a low-interest car loan, many Russian citizens have decided to purchase a vehicle without waiting for the amount of savings to reach the desired value. Car loan is a common service provided by most major banks throughout Russia. Car loans, along with mortgages and consumer loans, are among the most popular types of loans.
Characteristics of auto loan
Interest rates on car loans can vary significantly in different organizations, which requires a careful study of the issue on the eve of the transaction.
In order to attract new customers, each credit institution develops new actual offers for lending car purchases, providing additional options and bonuses. At times, the offers differ significantly among themselves, and the initially proposed interest rate when checking means the inclusion of additional costs, leading to a serious rise in the cost of the final purchase. You should carefully examine the proposals and details of the design, before choosing a particular credit organization.
Bank offers largely depend on the conditions of car purchase, participation in voluntary insurance, the borrower’s ability to confirm his earnings and the amount of income itself. The latter fact significantly limits the limit that is set by the financial institution to purchase.
When choosing a credit program, the borrower proceeds from a variety of indicators. In order to choose the best lending option, you should pay attention to the various parameters of avtozayma.
The size of the annual rate
The final overpayment of the loan directly depends on how low the interest is offered by the bank. The lower the percentage, the lower the overpayment. Many institutions, seeking to increase the volume of retail lending, issue loans at low interest rates, trying to compensate for lost profits in a different way.
Amount of the first installment
It is not always possible to find a car enthusiast who has an amount in his hands that can be used to make a down payment. At the same time, the lack of start-up capital significantly limits the banks’ offers, and the interest on the existing ones becomes maximum. By providing a loan for the purchase of a vehicle, the banking structure must be sure that the credit line will be repaid, and the funds will be returned to the bank account by the required date and with interest accrued.
The non-participation of the client in the financing of purchases at the initial stage forces the bank to charge higher interest rates due to the high degree of risk. Conversely, a citizen’s willingness to make a substantial amount proves his serious intentions to buy and pay off a debt, and in addition, he confirms his solvency and solvency.
Types of vehicles for car loans
Each financial structure has its own credit policy for car loans. Some banks specialize in domestic cars, others restrict offers only for new cars. Car loans for mileage vehicles are very narrow – only a small list of lending institutions will allow you to buy a used car. As a rule, banks are allowed to issue a loan for cars that sell car dealerships. Buy a car with your hands on borrowed funds will not work.
It is not a secret for anybody that when discussing the terms of disbursement of funds, banks insist on insurance coverage. The fact is that you can take a car loan only when you make a pledge, which is the car. In addition to Casco, the bank may insist on obtaining life and health insurance or other additional insurance products. Otherwise, the rate on the loan increases, or the borrower is completely refused to issue funds.
On the one hand, insurance products lead to an increase in the cost of the final purchase price, on the other hand, many motorists already use motor hull insurance as the best option for car maintenance, therefore this requirement will be insignificant. In addition, the refusal of Casco entails an increase in interest rates from the bank. The law does not allow commercial structures to impose additional services and services on their customers, but it will be difficult to prove that they were denied a loan on the basis of a refusal of Casco. Saving on insurance leads to a higher cost of the loan. It is necessary to carefully weigh the pros and cons, before abandoning the hull insurance.
Package of documents for targeted lending
Recently, the procedure for obtaining a loan has tightened – the bank needs additional guarantees to return funds in full and with interest. This entails a more complex negotiation process and high demands on the borrower. If earlier it was possible to issue a car loan for just two documents, today there is almost no such condition. In addition, the minimum set of documents almost always entails a high loan rate. One of the most important documents, in addition to a passport and driver’s license, is a certificate of earnings, issued by the last employer.
Participation in various programs
The state is trying to support the domestic auto industry, so for many years there was a special financing program for the purchase of domestic cars.
Promotions apply not only to Russian cars – many manufacturers of foreign-made cars cooperate with banks, offering discounts and bonuses, as well as hold short-term promotions when buying a car using borrowed funds. As a result, a financial institution may provide loans with a lower interest rate or significant vehicle discounts.
Understand the variety of proposals and choose the most appropriate option to help specialized online resources and loan calculator. In addition to the interest rate on car loans and the loan amount, the main parameters also include the maturity of the debt.
Depending on the length of the loan repayment period, all of them are divided into short-term (no longer than 36 months), medium-term (up to 60 months) and long-term (up to 8 years).
The total overpayment will depend on the number of payments and the duration of payments. The shorter the term, the lower the overpayment. The interest rate on a car loan with a short maturity is usually lower.
The car market also has express lending. The conditions of such proposals require the presentation of a minimum of documents, and the time period for consideration of the application – during the day. If the car is required urgently, you should be prepared for an increased interest rate on express loan.
Car loan interest rates
Currently, there is a difficult situation in the car market – a decrease in the solvency of the population has led to a revision of expenses, the abandonment of expensive cars and the complete abandonment of buying a car on credit. On the other hand, the number of borrowers who owe the bank after the purchase was significantly increased. Financial institutions have become stricter in lending. Complicating the issue of the need to compete in the struggle for each new customer.
Factors affecting the value of the bet
If you want to get a loan on the most favorable conditions, you need to know that the value of the rate on car loans in banks can fluctuate during the year, and also depend on other indicators:
- Seasonality. As a rule, the demand for cars rises in spring and autumn. Banks are developing special seasonal offers that stimulate demand and attract new borrowers.
- Deadline. There is a direct relationship between the length of the loan and the low rate.
- Rates on cars with a mileage higher than new cars. The reason lies in the fact that the car is issued as collateral for the entire loan period. Therefore, in case of refusal to repay the debt, the bank as a mortgagee will be able to realize the car and repay the accumulated debt with the proceeds. Since a used car costs less and is more difficult to sell, a financial institution needs to take into account various risks when concluding a loan agreement.
- Proof of income. If the borrower can confirm the official earnings, the bank with a greater degree of confidence can expect that the client is reliable and able to pay monthly installments. Accordingly, the car loan rate will be lower.
Offers of Russian banks for 2018
Currently, the following proposals for the purchase of transport:
|Bank’s name||Program||Term, months||Minimum percentage,%||Maximum amount, rub.|
|Gazprombank||“No down payment”||60||12.5||3,000,000|
|VTB 24||“Jaguar”||12-60||13.5||6 000 000|
|VTB 24||“KIA”||12-60||16,0||2 800 000|
|Rosbank||On a new car||6-60||13.9||5,000,000|
|Lokobank||On the security of a car||72||12.4||5,000,000|
|Alfa Bank||New car||60||16,0||3,000,000|
|Sberbank||With government subsidies||36||10.0||1,000,000|
In order to choose the best option, it is recommended to use a car loan calculator and first discuss the conditions in several banks at once. It is possible that during the discussion some nuances will be revealed that are not mentioned on official resources, or a bank employee will advise any special program with the lowest percentage of car loans, which will be valid at the time of application.
With a greater degree of confidence, you can expect a minimum loan rate if the borrower is willing to pay the first installment, get a comprehensive insurance, provide proof of his labor income and pay the debt within a short period of time.