The question of purchasing a car on the terms of long-term or short-term lending is very relevant for Russian motorists. The main condition for taking out a loan to buy a car is the availability of an income level that allows you to return the loan received.
To take a standard car loan for the purchase of a new car, either imported or domestically produced, you (as a borrower) will need to provide the bank with a package of documents: - income statement; - a copy of the work book, certified by the employer; - a copy of the driver's license; - copies of the passports of the borrower and his spouse, or spouses, if any; - a questionnaire; - an application for a car loan.
This standard package of documents can be expanded at the discretion of the creditor bank. For example, a bank may need additional documents: copies of birth certificates of children, marriage certificates or divorce, documents that confirm your ownership of real estate, etc.
After the creditor bank has received a package of documents from the borrower, it sends them to its security service for verification. Then the bank makes a decision on granting (or not granting) a loan. If a positive answer is received, the documents necessary for a car loan are drawn up. The borrower enters into an agreement with all interested parties: the lending bank, the borrower, the insurance company and the car dealer.
When buying a car on credit, the interest rate is not fixed, it depends on various factors (the size of the down payment, the loan term, the type of loan currency). As a guideline, the average interest rate on a loan provided for a period of up to three years in rubles can be 12-19%, depending on the size of the initial payment.
The smaller the down payment, the higher the interest rate on the loan. It will also increase if you are granted a loan for up to five years. If the loan is provided in foreign currency, then the annual interest rate will not depend on the loan maturity and will average 9-12%.
One of the car loan programs is an express loan, which is issued directly on the day of applying for a loan to the bank and contacting a car dealership. In this case, the bank is not interested in the borrower's solvency and income. However, for the promptness and transparency of obtaining a loan, the borrower will have to pay an increased interest rate of 13-50% in foreign currency, which also depends on the size of the initial payment. In addition, the express loan has a limited maturity period of no more than three years.
A car loan for a used car also has some features. For example, the interest rate on it can be 2% higher than that of a standard car loan. Also, the size of the down payment cannot be less than 20% of the value of the car, which is usually estimated by the bank's representatives.
If you buy a used car on credit, pay special attention to its age. This loan is provided only for cars not older than 10 years, while its first seller must be an official car dealer located in Russia. You will have to buy a car through the lender's car dealership. This type of loan is issued for a period of 3-5 years.
Recently, new schemes for buying a car on credit through a car dealership have appeared - Buy-Back and trade-in. The trade-in loan product is suitable only for those borrowers who already have a car, but for some reason they are no longer satisfied with it. The borrower must give this car as a down payment.
Under the Buy-Back lending scheme, the borrower buys a car at a car dealership, which is a partner of the lending bank, paying 15-50% of its cost. During the entire term of the loan, the borrower repays only part of the loan. This way you can reduce the amount of your monthly payment.
At the end of the loan repayment, you can re-register it again or take a new car and return this to the car dealership. All payments paid on the previous loan will be offset against the new loan, except for the remaining debt. However, this type of lending is not yet very common in Russia.