Not everyone who wants to buy a car will immediately have money to pay for such a purchase. Therefore, car loans are today a very popular and affordable way to buy your own car.
What are the features of a car loan
A car loan is a dedicated loan to buy a car. You can get a car loan from the bank on the condition that the car will serve as a bank pledge. Based on this, the bank reduces risks and takes lower interest on the loan.
Typically, a car loan rate is less than a cash loan. But in case of non-payment of the loan, the car is seized by the bank and sold to repay the loan.
Most often, the bank requires the borrower to insure the car under the CASCO program. In the event of theft or damage to the car during an accident, the bank will receive insurance. The car owner must renew the insurance annually, otherwise the bank will apply penalties to the borrower.
Before paying off the car loan, the passport for the car must be in the bank. If you need it, then you need to contact the bank and decide with him the question of how it is possible to receive it and when you need to return it.
Where to get a car loan?
There are many different banks in Russia. But after 2014, a large number of financial and credit organizations stopped issuing loans for the purchase of cars, replacing them with consumer loans with simplified conditions.
You may notice that few rating banking institutions offer such a targeted loan in 2017. In most cases, interest rates on car loans are the same as on consumer loans. Although earlier the difference was quite noticeable.
Name of the bank | % APR | Loan amount, rub | Date of issue | What cars | During what period is issued | Down payment,% of the cost of the car |
New | Boo |
"East Bank" | 19 | 100 thousand rubles - 10 million rubles | From 1 to 5 years | + | + | Right away | - |
Knoxbank | 12 | 100 thousand rubles - 10 million rubles | 3 to 10 years | + | + | During one week | - |
"Alfa Bank" | 12.5 | 100 thousand rubles - 5.6 million rubles | From 1 to 6 years | + | + | | From 10 |
"VTB 24" | 17.9 | 150 thousand rubles - 1 million rubles | From 1 to 7 years | + | + | | 20 |
Raiffeisenbank | 6.4-14 | 50 thousand rubles - 3 million rubles | From 1 to 5 years | + | + | Within one business day | 15 to 40 |
Russian Agricultural Bank | 17.5 | Up to 3 million rubles | Up to 5 years | + | + | Up to 4 days | From 15 |
Sberbank | 11.5 | Up to 10 million rubles | Up to 6 years | + | + | | - |
The most attractive conditions are offered by Knoxbank. But you can get a car loan in this bank only to residents of the Volgograd region.
Alfa Bank also offers fairly attractive lending terms. Here you can opt out of CASCO insurance. If you do not receive a salary through this bank, then a car loan will be issued to you at a rate of 15.5% per annum.
VTB 24 conditions are the most balanced in terms of rates and requirements to the borrower. But in this bank it is necessary to pay a down payment of 20% of the total cost of the purchased car.
Car loans from Raiffeisenbank are ideal for high-income borrowers living in large cities of Russia.
Speaking about how to get a car loan at Sberbank, it is also necessary to note the rather favorable conditions of this bank. The interest rate here is one of the lowest. Almost every citizen of Russia can get a loan for a car here.
If you receive a salary at Sberbank, the bank will make a decision on the issuance of such a loan within 2 hours. If the client is able to make an initial payment of 30% of the cost of the car, the bank will not require a certificate of income, a copy of the labor and the availability of guarantors.
An even greater advantage of Sberbank's car loan is that the amount of CASCO insurance can be included in the loan amount.
They make it possible to get a car loan without an initial payment by Vostochny Bank, Knoksbank and Sberbank.
If you decide to get a targeted loan for the purchase of a domestic car, then state purchases are provided for such purchases, which is very beneficial for the borrower.
How to get a car loan?
Getting a loan for a car includes the following steps:
- preparation of documents and preparation of an application for a loan;
- the bank makes a decision to issue a loan for a certain amount of money;
- choosing a car in the cabin, signing a contract of sale, making a down payment (if applicable);
- signing a loan agreement;
- CASCO insurance registration;
- payment by the bank of the cost of the car to the car dealer;
After that, a citizen can pick up the car and register it.
Before you get a car loan, you need to find out a full list of documents from the bank. Financial and credit organizations may require additional papers or information.
Important point
A car loan can be obtained first of all at a bank branch. The second option is a car dealership where a representative office of a particular bank can be located.
The borrower must decide where to get a car loan. It is important to find out what credit conditions and in which bank personally will be the most profitable and convenient for you. Be careful not to make an impulse purchase by taking a loan in the cabin. The percentage there may be higher than in the bank branch.
Disadvantages of car loans
Car loan imposes certain obligations on the borrower and has its negative sides:
- Quite a strong rise in price of the car compared to purchasing it for cash.
- It is necessary to repay the debt on a monthly basis. Before you get a loan, you should calculate your financial capabilities.
- Before repayment of the loan, the car is a bank pledge, and you can sell or give it only with the permission of the bank.
- As a rule, when applying for a car loan, you always need to pay CASCO insurance, and this is a fairly significant amount. Most often, the bank itself chooses the insurance company, and the amount of insurance may be higher than that of other insurance companies.
- If the car has got into an accident, the paid sum of insurance is sent to the bank, and the owner will not be able to repair the car for these funds.
Borrower Requirements
Each bank makes its own conditions for obtaining a loan. But usually you can take a car loan subject to the following requirements:
- the borrower has the citizenship of the Russian Federation;
- the age of a citizen receiving a car loan must be between 23-65 years;
- length of service in the Russian territory for a specified period.
In addition, credit organizations require calling several phone numbers (work, personal, phone number of friends).
How to get a loan for a used car?
Used cars are cheaper than new ones, and their condition can be no worse than a new one. Consider how to get a car loan for a used car.
Typically, banks set the following conditions for used cars:
Parameters | For foreign cars | For domestic cars |
Age | No more than 10 years | Not higher than 5 years |
Amount of credit | It is usually set by the bank in the amount of 500 thousand rubles. up to 1.5 million rubles | Similarly |
Machine weight | Up to 3.5 tons | Similarly |
Mileage | Up to 100 thousand km | Up to 50 thousand km |
A CASCO policy is required.
The borrower of a loan for a used car must meet the specific requirements:
- be over 21 years old;
- have a total seniority of more than one calendar year;
- Work experience at the moment in the organization for more than six months, and for some banks 3-4 months are enough;
- Be a citizen of Russia and have a residence permit in the city where he draws up a car loan;
- have a positive credit history.
Loans for cars are easier to get for drivers who have driving experience. Reluctantly, banks issue such loans to young people and people of retirement age.
A loan for both a new and a used car can be obtained at a bank branch or at a car dealership. It is most advantageous to do this at the bank through which you receive wages. For example, citizens who have salary cards at Alfa Bank can get a car loan at 12.5% per annum, and under general conditions the rate will be 16%.
The process of obtaining a loan for a used car
To get a car loan for a used car, you must go the next way.
Choose a credit institution, compare offers of different banks, their programs, interest rates and terms of loans. Thinking about how to get a car loan, you need to clarify whether there is a representative office of the bank you like in your area. Preference should be given to trusted banks with a good reputation.
Filing an application is possible with a personal visit to the bank or via the Internet.
The following documents are required:
- passport;
- certificate of income from work;
- driver's license;
- copy of the work book.
Next, the bank considers the application. After approval of the application, the borrower is provided, if necessary, a period of 1 to 3 months to search for a car.
After this, a contract of sale is drawn up with the seller of the car. Also compulsory is the issuance of hull insurance. This increases the amount of bank payments to the borrower.
The down payment is transferred to the bank account, from where the money is transferred to the car dealership. The average size of this installment is usually 20% of the purchase price.
Special attention should be paid to the execution of a loan agreement. The document to be signed must be thoroughly studied. It is necessary to pay attention to the following nuances:
- The final interest rate. It happens that they advertise one, but really provide more.
- The presence of commission payments for financial transactions (also called hidden).
- What are the options for repaying a loan?
After you received a car loan for a car and purchased it, it remains only to register with the traffic police. After that, you become the full owner of the car.
Good tips for buying a used car
Buy a used car in the cabin. This way you can avoid acquiring a faulty or stolen car. Moreover, car dealerships often organize campaigns for the sale of used cars.
If there is not enough small amount to buy, a car loan is better to prefer a consumer loan.
There are also specialists such as loan brokers. They know how to get a car loan on more favorable terms. Brokers will help you choose the most optimal loan program.
Getting a car loan with bad credit history
If you previously made delays in repaying other loans, then most likely this will negatively affect your credit reputation.
Before you get a car loan with bad credit history, you should contact the credit history bureau for help. If it states that you have delays, you need to urgently pay them off. If any erroneous data on the delay is indicated, you must contact the bank to resolve this issue.
To improve your credit history, you can take several small loans and repay them on time and in full.
You can still apply to small or recently opened financial and credit organizations. Such institutions are looking for customers and agree to set not too stringent conditions for borrowers.
Another option is to apply for a loan to microfinance institutions, pawnshops or financial companies for which the client’s credit history is not important. But interest rates in such organizations are much higher than in banks.
How to improve the reputation of the borrower
You can also increase the likelihood of receiving a car loan in the presence of a negative credit history in the following ways:
- find a guarantor with an excellent credit reputation;
- submit a certificate to the bank about a high level of income or ownership of expensive values;
- provide a deposit;
- make an advance payment of 50% of the cost of the purchased car.
Getting a car loan online
Almost any bank today offers to apply for a loan through the Internet. To do this, in a special form, you must specify your personal data, loan amount and other information.
After that, the bank will issue a preliminary opinion on the possibility of issuing a loan to you. But you still have to personally come to the bank to provide the required package of documents and sign the contract.
Car loan - to take or not?
A car loan has many negative aspects, but there are also positive aspects. It is necessary to carefully analyze all possible offers of banks, their loan programs, calculate the overpayment and other obligatory expenses on car loans and compare them with the overpayment on a simple consumer loan. You also need to consider the possibility of state support when buying a domestic car.
To understand this sea of nuances and conditions of loans of different banks, do not be afraid to resort to the help of professional credit brokers.
Take care of your credit reputation. After all, if it is bad, then getting a loan for a car will be much more difficult.
Car loans can be carried out both on new and used cars. It is better to buy a used car at a car dealership, because it will be guaranteed not in theft and not broken.