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In fast paced times like these, everyone has the need to travel often, be it for personal or professional reasons. Though there are many means of transportation available at ones disposal, people want to travel the easiest and most sophisticated way. This has made cars indispensable for so many. But not everyone who dreams of a car can afford to buy it! Moreover, in these difficult economic times it’s more difficult than ever for a lot of people to bear the expense of buying a car! But thanks to car loans, the dream of buying a car can be realized after all!

Car loans are a type of personal loan in which money is loaned for the finance of a car. The amount is paid back to the lender over a fixed period of time along with interest; usually as monthly deposits. A non-refundable opening deposit is also made. The car loans are of two types basically:

Secured loan: In a secured loan, the buyer has to provide the lender with a suitable object for security (In this case, usually a car is taken as the item of security). In case the buyer is not able to pay back the loan, the lender is entitled to repossess the item of security.

Unsecured Loan: In this type of loan, object of security is not required. However, the interest rates are much higher compared to the secured loan.

Cars can be leased too. Leasing a car is very different from loaning a car. In leasing, the highest amount paid is the initial deposit which is only about four of five times the monthly installments. It is usually availed by those who find the initial deposit of car loans to be too high to pay or by those with a bad credit history.

It is also advisable to go for used cars as the interest rates are lower and the down payment would be much less when compared to the rates involved in buying a new car. The rates also differ according to the model and manufacturer of the desired car.

So regardless of what the financial condition is, it is possible to realize the dream of buying a car, used or new, with the help of car loans. The Internet with its catalog of many trustworthy lenders makes this process much easier for those hoping to get a car loan.

Car loans can also be availed from dealers and manufactures, but this will be very expensive when compared to the other means available for auto financing.

One more important factor to consider while getting a car loan is how well you can manage to repay the debt. You have to be able to pay the installments on time regardless of the mode of payment whether it be credit card, cash etc. Sometimes even if you put in all necessary efforts, there are chances where you find yourself unable to repay the loan. Just to help you in such times, there is another scheme which you could adopt – car refinancing. It is a loan with a low interest rate that repays the remaining debt on your car loan. There are two conditions to be fulfilled before you could apply for refinancing: (1) your car has to be less than 5 yrs. of age. (2) The market value of the car must be higher than the amount of payment remaining in your existing loan.

The current auto loan rates for new cars: 3.75-9.00% for 0-36 months,
4.75-10.00% for 37-48 months,
5.75-11.00% for 49-60 months,
6.75-12.00% for 61-84 months.
The current auto loan rates for used cars: 4.75-10.00% for 0-36 months,
5.75-11.00% for 37-48 months,
6.75-12.00% for 49-60 months,
7.75-13.00% for 61-84 months