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About Car Loans

A loan is a type of [debt]. All material things can be lent but this article focuses exclusively on monetary loans. Like all debt instruments, a loan entails the redistribution of financial [asset]s over time, between the [wiktionary:lender] and the [wiktionary:borrower].

The borrower initially receives an amount of [money] from the lender, which they pay back, usually but not always in regular installments, to the lender. This service is generally provided at a cost, referred to as [interest] on the [debt]. A borrower may be subject to certain restrictions known as [loan covenant]s under the terms of the loan.

Acting as a provider of loans is one of the principal tasks for [financial institution]s. For other institutions, issuing of [debt] contracts such as [bond (finance)] is a typical source of funding. Bank loans and credit are one way to increase the [money supply].

Legally, a loan is a contractual promise of a debtor to repay a sum of money in exchange for the promise of a creditor to give another sum of money.

Types Secured A [mortgage loan] is a very common type of debt instrument, used by many individuals to purchase [housing]. In this arrangement, the money is used to purchase the property. The financial institution, however, is given security - a [lien] on the title to the house - until the mortgage is paid off in full. If the borrower [Default (finance)] on the loan, the bank would have the legal right to repossess the house and sell it, to recover sums owing to it.

In some instances, a loan taken out to purchase a new or used car may be secured by the car, in much the same way as a mortgage is secured by housing. The duration of the loan period is considerably shorter - often corresponding to the useful life of the car. There are two types of auto loans, direct and indirect. A direct auto loan is where a bank gives the loan directly to a consumer. An indirect auto loan is where a car dealership acts as an intermediary between the bank or financial institution and the consumer.

A type of loan especially used in [limited partnership] agreements is the [recourse note].

Unsecured These may be available from financial institutions under many different guises or marketing packages:

[credit card] debt,
personal loans,
[bank] [overdraft]s
credit facilities or lines of credit
[corporate bond]s

The [interest rate]s applicable to these different forms may vary depending on the lender, the borrower. These may or may not be regulated by law. In the United Kingdom, when applied to individuals, these may come under the [Consumer Credit Act 1974].

Abuses [Predatory lending] is one form of abuse in the granting of loans. It usually involves granting a loan in order to put the borrower in a position that one can gain advantage over him or her. Where the moneylender is not authorised, it could be considered a [loan shark].

[Usury] is a different form of abuse, charging excessive interest. In different time periods and cultures the acceptable interest rate has varied, from no interest at all to unlimited interest rates. Credit card companies in some countries have been accused by consumer organisations of lending at usurious interest rates and making money out of frivolous "extra charges" Credit card holders pay Rs 6,000 cr 'extra' [May 03], [2007]

Abuses can also take place in the form of the customer abusing the lender by not repaying the loan or with an intent to defraud the lender.

See also

[Finance], [Personal finance], [Settlement (finance)]
[Debt], [Consumer debt], [Debt consolidation], [Government debt]
[Bank], [Fractional-reserve banking], [Building society]
[FAFSA]
[George D. Sax] and the Exchange National Bank of Chicago - Innovation of instant loans
[Annual percentage rate] (a.k.a. [Effective annual rate])
[Interest-only loan]
[Student loan]
[Payday loan]
[Refund Anticipation Loan]
[Federal student loan consolidation]
[Federal Perkins Loan]
[Stafford loan]
[Title loan]
[Syndicated loan]

References

Information Reference: Wikipedia.org

Car loans

Questions and Answers

Car loans..?

Q) Got a new car, had to take out finance. There is insurance added to the loan. But it says there is no optional payment protection insurance on the loan. It is down as other insurances. What are other insurances..Can i cancel them.

A) all the insurances are optional, it's a common trick used by lenders to screw extra money out of you. By law you have 7(or maybe 14, I forget) days to cancel completely.

car loans from first responce finance?

Q) i am looking to buy a car and want to ask first responce for there help in finding a nice car my number is 07958525026

A) Is it wise to be putting your mobile number on here . The net is full of weird people and i am sure you don't want them all ringing you up .

can u name loan companies that give personal or car loans in ireland please?

A) NIIB Finance are good (Northern Ireland) - specialise in car finance. Check out www.niibfinance.com

car finance and loans?

Q) does anyone know of a car finance company or unsecured loan company, have been declined almost everywhere, they tell me i have been approved and all that bollocks and when it comes to finalising they say they cant do it, my credit rating aint good but there must be somewhere that can give me credit

A) Hi slick. Here are a few companies where you will definately get credit as most do not do credit checks : 1)http://www.e-financialaffiliates.com/track.aspx?cid=53&efid=3492 2)http://www.e-financialaffiliates.com/track.aspx?cid=24&efid=3492 3)http://www.e-financialaffiliates.com/track.aspx?cid=23&efid=3492

what do you think of people who does loans with the bank to buy themsleves a new car?

Q) do you understand why some people wnat to have a nice car and then borrow money from the banK? it doesn't have to be big money but just a loan for a car u know; ive got a friends who does it. then others friends who think that if you don't have the cash then you shouldnt borrow money to the bank to be able to buy yourself a new car. i'll tell you what i think when i chose an answer ++

A) Some people are not very good at saving money (like me) but can afford to pay out a lumpsum each month, so getting a loan is like an easy way of not saving the moey yourself, or just getting th money quicker. Then you pay it back at the rate you can afford, or could have afforded to save each month. Sometimes loans are for simplicity aswell.

If somebody loans you a car for a couple of days with the following instructions:?

Q) disconnect the battery each nite because the electrics were faulty, keep an eye on the water...(a K reg diesel 1.7 Cavalier purchased for £250) Car used over two weeks ( approx 30 miles driven) and the above instructions followed.. to be informed later once the car was returned that the head gasget had blown and the financial implication of that lied with me which was £370 this price due to the fact that the car had been serviced and the radiator apparantly had a leak (told to me afterwards)... who do you think is at fault and how much do you think should be paid if anything??

A) just in my opinion,,i think you walked right in to that one,,it sounds like they knew it was going to tear up on you,, i honestly wouldn't know who should pay for it,,it sounds very convenient for them this way ,,i may be wrong,but all this sounds like they seen you coming,,good,luck,i don't think id pay it,,if it were me,but your in a different situation so use your best judgment on this situation,,good,luck on this one.

Car on finance or bank loan?

Q) I have around £1,200 left to pay on a car loan my mother took out in her name which I've been paying over the last few years. But I'm looking to buy a new car in the near future. If I took a bank loan, I could use some of the loan to pay off the money I owe my mum and use the rest to get a new car. But if I take out finance on a new car, I will still have the rest of the money I owe my mum to pay. Although I heard that places like Arnold Clark will write a cheque to pay off what you owe on your old car - something I would like to do. What do you think I should do? Visit the bank or go with a dealer and get finance.

A) Bank or places like Tesco, they charge about 6.5% interest, they are far cheaper than car finance which is about 15% if not more.

i owe 28gs on car loan car book value is 24,585 because of miles of car its not attractive at that cost?

Q) with my online competition,so i may have to settle for 23,000 but the problem is i cant get approved for a loan to make up the difference to pay car of to get title released,i cant save because of the high car payments

A) Now is it just me, or is the above entirely devoid of any question??? To me it just seems you are getting your just desserts for thinking you had to have a car worth that sort of money without the means to pay for it... modern day rampant consumerism claims another victim!!!

Hi. Looking for a car loan. Bad credit history.?

Q) I have been offered a loan for £5800, and over four years i will be paying back over £12000! (Accept car credit) Does anyone know of anywhere else? Sorry, i mean approved car credit.

A) Welcome finance. My partner was bankrupt and they let him have one, but the finance rate will always be higher as your a higher risk.

HELP!!! I am being sued over a repo'ed car loan on my wife's car eventhough I never signed a legal contract

Q) My wife bought a car in her name only, my name appears no where on the contract. The car was eventually repo'ed. My wife then filed bankruptcy. Next thing I know I am being sued for the balance of her car note. They say the have justification under the "Family Purpose Doctrine". Also, they say that because the car was used to accomplish family responsibilities, I am fully responsible. Do they have a case? Should I be worried? Live in Colorado

A) It actually depends on the state in which you reside. If you live in one of the nine community property states any debt incurred by either spouse individually or by the couple together is considered marital property. These states are: Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington and Wisconsin. This means any debt incurred by one individual in a marriage is a debt for that person's spouse. If you don't live in one of the above states, check on the legal issues in your state.

Car loans?

Q) I am looking to get a used car and I want to finance it through my bank. How do car loans work? Do I need to find a car first or do I get the money from the bank first? What if I get a loan for 12k and I find a car that is 10k - do I need to give back the extra 2k?

A) Go to your bank or credit union and get approved for a loan. Go to the dealership and buy the car. They write the contract or purchase order and you can take that to your bank or cu and your loan is for the amount of the purchase of the car. The dealer might have access to your bank or credit union directly and they can take care of all the paperwork. They might also be able to get you a better rate than the bank.

Car Loans??

Q) Does anyone know where someone with not so great credit can get a car loan? Please list websites as well as any additional information you can give. Thanks

A) go to capitaloneautofinance.com

Car Loans?

Q) Does anyone know of any good places to get a auto loan if you have bad credit, but have a very good paying job making more than enough to pay a car payment?? Also was hoping it didn't have too high of an interest rate or downpayment? Alot of the places I am finding online are scams.

A) You CAN get a decent car loan, even with bad or no credit. I've done it, but you'll have to look around. Shop around for lenders who specialize in bad credit car loans. There are usually some nationally based car loan companies who specialize in bad and no credit car loans who advertise on the page linked below... http://www.axalda.info/bad-credit-car-loans.html

car loans?

Q) what are some reputable car loan web sites for people with poor credit? thanks

A) HSBC, but all these website are really high interest rates so to be honest there really isnt a good one out there you are better off getting a loanfrom a good dealership loan dept. Just keep a eye on the interest rate and how long the loan is for.

Car Loans! Help!?

Q) I am in the process of looking for a car loan. The car I have now is not reliable and its time for a new one. I don't have great credit (basically not enough credit). I don't want to start applying for all these loans and mess up my credit period. So does anyone have loan companies that are relevantly easy to get a car loan with no/bad credit? People with personal experience would be helpful! Thanks a lot!!

A) several factors involve here. cash down is king,if you don't have alot of credit you need to buy your credit with cash/trade in down. by the sound of your car it sounds like you have a wholesale car,(something worth about $1000 OR LESS) If you have good job time, good residing(one year or more on both) and make at least 1800 gross per month some high risk loan company should pick you up, unfortunately you'll be 18-21 percent interest. My advice large cash down, strong co-signer, or go to your local bank and talk face to face with a loan officer. I've been in the car business fifteen years. P.S. If you can avoid it stay away from buy-here, pay here lots

Multiple car loans Question. Refinancing a good idea?

Q) My fiance and I have 3 car loans. Each through a different bank. One for 19,000 one for 13,000 and one for 9,000. The car with 9,000 left needs to be sold off. Can I refinance all 3 car loans into one payment? And if so, can I sell one of the 3 cars. Right now the banks have the titles so I can sell any. If I refinance the cars into one loan will the bank that does the refinancing accept 2 car titles to allow me to sell the other off?

A) If you can get a cheaper interest rate by all means yes do it.

How do car loans work?

Q) I'm a junior in college and I use my dad's car to get to and from school during breaks or holidays. I'm paying for school through students loans, so I will be in debt after school. So I was wondering how car loans work because I need a something big like a jeep or something, and I'm wondering if there is a such thing such as a student car loan. Something I can pay back after I graduate from college. I hope that don't sound dumb but I don't know anything about car loans. responding to j s, being a junior in college and not knowing about car loans doesn't means I'm not ready for the real world. You might of had many people in your life while you were young to help you understand a lot things such as car loans, unfortunately I don't have that in my life. So I must learn somewhere in learn, but thanks for the info. God Bless

A) Set your sights on that Jeep once you get that job! Earning is a privilege! Self-satisfaction. Motorcycles are easy on the gas and maintenance. Get a double seater for your dates.

I have two car loans and would like to put money down towards one of them. Which one should I choose?

Q) I have two car loans with the same interest rate 5.65%. One loan is 10,281 and the other one is a new car loan at 22,525 that's with taxes included. I plan to put 6,000 down towards one of the loans. Do I put the money on the lower one to pay it off sooner or refinance the new one and decrease the taxes and interest paid over the life of the loan. It doesn't cost anything to refinance with my credit union, so there are no fees involved. Im having a hard time determining which way is more cost effective.

A) In my experience, I find it better to pay off whatever you can sooner. That way, once you pay it off, you can put what you save from paying on that one to paying more on the other.

School loans v. car payments v. 401K?

Q) I have 2 different school loans, one is at 7.2% interest rate, the other is twice the amount with a 2.8% interest rate. I've been paying about 2-3 times the minimum every month on the higher interest rate loan, but I'm still pretty far off from repayment. I am about a year into my car loan (a 48-month loan, unsure of the interest rate). I've been out of college and working for a year and haven't set up my 401K yet. I'm only 23 so I feel like I have lots of time, but everything I read says to do it ASAP! Should I be funding that instead of paying my loans back faster than required? I'm not living paycheck to paycheck, I generally have some money left over to save every month and I don't carry credit card debt. I feel like I'm smart about money, but at a young age it's all kind of new and overwhelming! Any standard advice that could help me feel like I have a grip on all this? Any books that lay it out plan and simply?

A) You seem to be on the right track. BUT you haven't figured out why everyone is telling you to do your 401k NOW. simply put - $20/month saved now will yield approx $100,000 at age 65. If you wait till age 50 it will take about $500./month. Get the picture. Time is on your side when it comes to accumulating money. The less time you have the worst it becomes for you. Even if you don't start with the max, start with something. It is also a psych boost to see the account grow.

I have 2 car loans. The first one has a balance of $18,000 and the 2nd one a balance of $23,000 If i paid of

Q) I have 2 car loans the 1st has a 18,000 bal and the 2nd has a 23,000 bal. If I paid off the 18,000 car loan how would it effect my credit? It has been a perfect pay automobile loan. I am trying to reduce debt and raise credit score. I have had the loan for 2 years with Citifinacial Auto who reports monthly to the 3 credit agencies?

A) It definately wouldn't hurt your credit to pay it off!!