Borrowing money for a car, how do you do that?
Borrowing money from a bank or another type of lender is a step that many Dutch people take. In itself there is nothing wrong with borrowing, but there are of course some risks involved such as the mandatory sentence: “Pay attention! Borrowing money costs money ”that a loan provider must have on the site also indicates. One of the most important things when taking out a loan is that you have a clear view of the purpose for which you are borrowing. This prevents you from spending the money from your loan on things that you do not necessarily need. In that regard, borrowing money for a car is a clear matter. You know what the car you want to purchase costs and you can make that known to the lender. Borrowing money for a car therefore means using a customized loan.
Special loans for cars
There are a number of lenders who advertise specifically with opportunities to borrow money for a car. Examples of this are Deo and Funget. However, a bank such as Rabobank also screens with the terms Car loan and car financing. What is so special about a car loan? The disappointing answer is that there is actually nothing special about a car loan. Or rather: a special loan to borrow money for a car does not (officially) exist. The term car loan or car financing is used on the websites of the providers only to be able to reach consumers through the search engines. But if a car loan does not actually exist: what do the providers mean by a car loan? It is fairly straightforward: with a car loan, lenders mean nothing more than either a personal loan or a revolving credit. So a standard consumer credit form.
Borrow money for a car: personal loan
A fairly logical form of borrowing when you want to borrow money for a car is the personal loan. This type of loan has a number of advantages and one of which is certainly clear. With a personal loan, there are no changing conditions. This means that with a personal loan a fixed amount is borrowed for a predetermined period. The interest rate is also fixed. This loan form is very suitable for purchasing a car because you normally know how expensive the car is that you want to purchase. So you know what amount you need and you can borrow that amount.
Borrow money for a car: revolving credit
Another option that is used by quite a few consumers to finance a new car is taking out a revolving credit. According to most financial specialists, a revolving credit is generally a little less suitable and suitable for financing the purchase of a car than a personal loan. The uncertainty with a revolving credit is somewhat greater; among other things due to the variable interest rate and because the final term is not precisely determined. Yet a revolving credit is in itself a possibility to finance the purchase of a car.