Are you in need of a large amount of capital? Do you have a one-time expense that requires immediate attention in regard to your vehicle? If so, you may find the terms and conditions of an installment loan of value. An installment loan provides a large sum of money that’s typically used for a single payment but retains a more lengthy repayment policy relative to other types of loans.
Moreover, an installment loan is accompanied with a fixed amount of interest and payment fees required at regular intervals (monthly, bi weekly, weekly, etc). And one of the most common types of this loan variation is the car installment loan.
So whether you have car title loan or a car equity loan in Calgary, an installment loan may be useful for helping you to relieve some of the financial pressure related to these overdrafts. Keep reading to learn more.
What’s the Borrowing Amount?
The answer to this question will be chiefly based on the lender. However, as a general rule of thumb, car installment loans can start from $1000 and go as high as $5000. But there are also lenders who will go under $1000 as well as some who will go up to $10,000 or more.
As such, the borrowing amount is all predicated on who you go in addition to the specific amount you’re asking for.
What Are the Details of the Repayment Terms
Generally speaking, car installment loans are usually recouped on a monthly basis that spans anywhere between 1 and 5.5 years. Additionally, the more lengthy the time frame for repayment, the greater the interest rate. As a result, the cost for your automobile on a 96-month loan, for example, will be greater than the cost of a 36-month loan.
Moreover, there are also fees associated with the administrative dealings of the loan (insurance fees, processing, etc).
Interest Rates For Car Installment Loans
Typically, you can assume an annual percentage rate in the 3-digits for car installment loans. It’s not at all uncommon to see 15% to 60% for such advances. However, there are things you can do to counter this. For example, you can shop for a loan between 2 to 5 years, and as a result, you might be able to obtain a reduction in your interest rate.
Requirements of a Car Installment Loan
In Canada, there are a myriad of criteria that must be met in order for you to qualify for a car installment loan. They are as follows:
- Must be of legal age of the province you reside in.
- Must own your own vehicle.
- Must be the owner of the title of your vehicle.
- Vehicle has to be registered to you and insured in your name.
- Valid Canadian Driver’s License.
- Proof of permanent Canadian residence.
- The vehicle must be under 10 years of age.
- Must have an active bank account and provide proof of income.
- Good credit is strongly recommended, however, not completely necessary.
Meeting all of the requirements listed above will drastically improve your chances of getting approved for a car installment loan.
How is a Car Installment Loan Different From a Car Title Loan?
The main difference between a car installment loan and a car title loan is found in the repayment period. Typically, an auto title loan will have repayment due within one month’s time to as long as a few months based on the amount borrowed, in addition to the lender you’ve chosen.
A car installment loan time frame, on the other hand, can go from 12 months to as high as 69 months or more.
Car Installment Loans: What to be on the Lookout for
As in anything, it’s important to do your due diligence. Consequently, be sure to be on the lookout for certain shady and predatory lenders and practices when it comes to car installment loans, namely:
- Approval guarantees. There are no guarantees for approval in this industry.
- Unconventional options for payment such as undetectable practices and engagements.
- Payments or fees that require upfront deposits.
- Payment fees for atoning your loan before the deadline.
- Coercion or pestering to takeout a larger loan than needed.
Conclusion
Viligence is always a best practice when looking into loan options. For this reason, be sure to review your budget to ensure you’re able to repay your car installment loan. Or else you run the risk of getting caught in a debt cycle that can prove to be very difficult to escape from.
If you’re interested in learning more, or would like to speak with a loan specialist to answer any questions, be sure to contact Cash Loans Alberta today for additional information.
