Many households are thinking of the revolving loan to buy a car or a vehicle (caravan, utility, van, motorhome, motorbike, etc.), is this really the best financing? We will explain everything to you.
Automobile and revolving credit
The revolving loan (also called revolving loan) is a reserve of money which makes it possible to buy an asset (TV, car, furniture, groceries) on credit and defer payment with a spread. That is to say that we activate the loan, that is to say the use of the sum available, and the repayment is made over the following months, in 3 times, 5 times see 10 times according to the terms of the loan contract.
As part of the purchase of a vehicle, the borrower can use a revolving loan up to the limit where it is a used vehicle with a relatively low price, a few thousand euros only. The reasons are obvious, these loans are very expensive (high APR), it is advisable to opt for another loan if the amount of the car is large.
Auto and revolving credit: the alternatives
Three alternatives are possible to the revolving loan for a household wishing to buy a car, they are the personal loan, the affected loan and the grouping of credits. The personal loan does not imply to justify the purchase, that is to say that the use of the credit is free (on the same principle as the credit without proof), its cost is lower than for the revolving loan but remains high.
The second alternative is the loan allocated to consumption, it is a credit granted on condition of justifying the desired amount, in other words it requires a quote or an invoice to obtain it, the loan conditions are particularly advantageous, it is that, the rates are lower than other loans.
Finally, the last solution is the grouping of credits, this financing makes it possible to add an amount for a project such as the purchase of a car, this operation is particularly suitable for households already having credits in progress and not wishing to unbalance their finances , in particular thanks to the reduction in the amount of monthly payments.