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How the average person can save money quickly and easily

Smart Car Loans Save Trouble

sci-7Let’s face it. Buying a car is not as easy you might think. If you happen to pick a wrong financing method, you could end paying dearly for that automobile. The financial crisis was triggered by the real estate collapse. The same sort of subprime loans that ignited the housing mess are being sold to finance U.S. car loans. Consumers can save themselves all sorts of problems buying smart car loans.

There are a wide variety of options consumers can make to find the best car-financing option.  One good idea is to choose a plan that will limit your borrowing costs.  Feeling lost? Let us help you decide the best car-financing option.

1-Loan Against Fixed Deposits

One of the smartest ways to finance your car purchase is to take a loan out against your fixed deposits, if you have savings. The interest rates are considerably lower than conventional car loans and do not require you to liquidate deposits. The procedure for getting a personal loan against fixed deposits is easier and can be much quicker at most banks. It will require you to submit a few documents, including a promissory note, overdraft agreement and deposit receipts.

Typically, borrowers have the full right to choose the duration of the deposits, which can be revoked after it matures. Your deposit money will provide for the personal loan without you having to worry about monthly installments. Additionally, there is no pre-payment penalty charged and the borrower can easily pay-off the loan sooner without incurring any extra charges.

2- Auto loan from a Credit Union

If you don’t have enough cash for a fixed deposit loan, your next best option would be to take out a personal loan from a credit union. Getting a loan from a private party would require you to pay less interest than the dealers. Not only does a credit union approve your loan long before you buy a car, but it also lets consumers borrow a larger amount of cash than most banks and other lending institutions.

Credit unions are also more likely to negotiate with you, despite a bad credit history. The U.S. foreclosure crisis has left millions of Americans with damaged credit. Credit unions understand this and are often more lenient than banks. They are more concerned about payment patterns at the present time rather than your financial history. These organizations are often willing to work with you in the case of financial hardship during the loan period, instead of more quickly repossessing a car like most banks.

3- Car Loans from Family

Another option is to take a car loan from a family member or friend. The people closest to you may have no qualms about lending you money for your new car, provided the funds are available. They may charge you minimal interest or may not charge it at all. But many loans between family and friends often include interest because banks historically charge interest on car loans.

Regardless of whatever way you decide to borrow money for a car loan, it will always be easier to pay off a relative or friend without having the fear of losing your home or car to the bank. However, it’s best to avoid jeopardizing your relationships at all costs by ensuring that you make payments on time and in full.

If you would like to know more about choosing the right car, then we have a great article on great ways to pick the right car for you

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