Most cash loans are for any purpose. The customer is not obliged to inform the bank how he plans to use his loan. The situation is slightly different when we make a commitment to buy a property (mortgage) or, for example, to buy a car. In the latter case, the car will be a bank collateral in case of problems with loan repayment. The bank will also become a joint owner of the vehicle until the end of the loan agreement, i.e. until the last installment has been repaid.
Cash car loan on favorable terms
A loan for a specific purpose
The rule is simple – the higher the customer’s own contribution, the better the credit terms. However, it happens very often that bank customers do not make any own contribution, and the entire purchase is financed from a bank loan. This type of loan is no different from other loans on basic issues, i.e. on the bank – customer line the amount of the loan, interest, insurance, other handling fees are set, and the repayment schedule is set.
Cash car loan service
When the bank sends information related to the payment to the seller of the car (e.g. car dealership), the borrower will be obliged to obtain a new registration certificate and license plates. For all these activities, the new car owner will also need the authorization of the co-owner. So, in order for them to start all procedures, the bank must send the client the original of such authorization.
The difference between an ordinary loan and a car loan
It is that the bank will periodically require the customer to provide documents. Therefore, each year you should send a copy of the new liability insurance contract to the bank’s headquarters. In the event of a road collision, accident, theft and other events that will affect the physical condition of the vehicle, the lender is one of the parties because, as previously mentioned, he is the co-owner of the vehicle until the customer repays the loan.
Car cash loan and vehicle resale
The bank’s customer may decide to resale the vehicle
During the loan period. All formalities and steps must be agreed with the co-owner. There are situations when the borrower simply wants to exchange the car for another one, or the material situation forces him to resale, then the bank may agree to meet its claims by cash from the sale of the vehicle, and then a new repayment schedule for a smaller amount is set by how much is the difference between the resale amount and the outstanding portion of the loan.