Car Loans (Auto Loans)
If you are looking for a car and don't have enough money to buy a car, you can apply for auto loan. Auto loan is loan which you take from lender to purchase a car. Like All other loans their are two parties involve in it. Lender and borrower.
Car or Auto loan are the most popular loans in the world. It is much easier to get and lenders are more interested in auto loans. Lenders are comparatively much secure in auto loans. The amount of loan is not big as much as compare with other loans. Car remains on lender name until the borrowers clear the installments. Insurance is must for auto loans. Insurance benefits both the parties. In USA car insurance is must for every car. But in some countries insurance is not mandatory but for auto loan its essential part of the deal.
To get approved for auto loan you have enough source of income that you can pay monthly installments. You need a financial statement and down payment. Down Payment is a percentage of the total car value you pay to car seller and remaining amount will be financed by the lender. Minimum down payment is 10% of the total value.
You can get auto loan from 1 year to 7 years. As you increase the loan period, more interest you have to pay back. But as you increase the tenure your monthly installments will come down.
Your Installment consist of two things, actual loan and interest on loan.
If you are unable to pay monthly installments. Lender will give you grace period of two to three months and still you don't pay installment lender will get the cat and sale it in auction. First lender will get his loan money and interest back and remaining amount will be given back to borrower.