Do you use a personal/payday loan, or do you have it in mind to finance a car? It is a form of borrowing money where you choose a fixed interest rate and a fixed term that you can agree with the bank in advance. You cannot just repay early, but you already know that your monthly payments rates will not rise unexpectedly. In that regard, the personal loan or an installment loan is a great choice if you want to finance the purchase of your car.
We also refer to this as the installment loan, since in most cases you will pay off the loan on a straight-line basis. That means, for example, that you borrow $10,000 for a period of 5 years. You then pay back $2,000 each year, spread over the 12 months. This allows you to calculate in advance what you will pay each month in repayment. You can also calculate the monthly interest on the basis of the outstanding debt at that time. Do you opt for a car loan based on an installment loan? Then the costs will decrease a little further each month, until you have repaid the total amount.
Clarity and transparency
The great advantage of a personal loan or an installment loan is the high degree of clarity. You can calculate in advance exactly what you will pay from month to month, so that you do not just have to deal with an increase in costs or other annoying surprises. Instead, you calculate the whole thing easily and with a car loan simulation you can compare the various providers with each other. Choose the credit that best suits your personal wishes, preferably with a competitive interest rate that will keep costs down. You would certainly be allowed to classify car financing under personal loans, although it is therefore called differently. In addition, the interest rate also differs and you are therefore better off with a car loan. The differences are not up, since we only focus on car loans, but you could of course also check this yourself.