If you are thinking of acquiring or renovating your car, you may be wondering which credit system is best for you. It is clear that the car credit is thought for these situations, but the variant of consumption can also be. The question then arises, which is more convenient? A consumer credit or an auto credit?
What is consumer credit?
Consumer credit is a type of loan granted by a financial institution for the acquisition of goods or to have a certain amount of money. The goods that can be acquired through this type of credit are automobiles, household appliances, different fixed assets, and they also allow for trips, payment of medical fees or any leisure activity.
You must take into account that the maximum term to pay the consumer credit must not exceed the useful life of the good or service. One of the advantages of this type of credit is that it handles better interest rates compared to credits destined for specific purposes. Furthermore, if you use it to acquire a vehicle, it will not be pledged as a guarantee, which will facilitate transactions such as sale, even if the credit has not been paid in full.
Automotive credit is offered by dealers or banks
Generally has higher interest rates than consumer credit and they take the vehicle as a pledge of collateral, which prevents commercial operations with the vehicle until all the debt has been paid.
Among the advantages of automotive credit are that fewer requirements are required than for other types of loans, they are more flexible, they receive your previous car as part of payment and they are generally approved in a very short time.
After seeing the differences between these two types of credit, you have the tools to decide which one is the most convenient for you when purchasing your new car. Do not forget to check with different entities to compare the different rates they offer and choose the one that suits you best.
In Lenders Bank you can simulate the interest and terms of your automotive credit or your consumer credit. Enter our credit simulator and make an informed and smart purchase.