What is credit?
Credit is a type of auto loan that consists of acquiring a vehicle in exchange for the payment of installments over a period of time. It is increasingly being offered by dealers and banking institutions for buyers not wanting to engage in the long run.
Like Lease with Purchase Option (LOA) or Long Term Rental (LLD), this is a parallel solution to classic auto lending. It is possible to contract for a period of between 12 and 48 months, often for a kilometer package not to exceed, under penalty of having to pay a supplement.
Note that this balloon credit is most often granted provided you contribute at least 15% of the value of the vehicle!
The particularity of the credit is based on its method of repayment. Thus, this auto loan must be fully repaid when the contract expires. That is to say that the amount borrowed is not amortized over time, you do not pay every month borrowed capital but only interest, resulting in a lower monthly payment.
If you wish to separate from the vehicle during the credit, a repurchase agreement may be signed so that the seller agrees to redeem the vehicle at a pre-determined price.
Why choose credit?
The advantage of balloon credit lies in the opportunities available to you during and at the end of your contract. Thus, you can repay all or part of the loan at any time. Similarly, at the end of the contract, you can:
- Buy the vehicle at the price defined in advance in the contract and close the credit;
- Return the vehicle to the seller and close the credit;
- Resell the vehicle yourself and close the credit;
- Renew the lease agreement and continue the credit.
Since you only pay interest when using the vehicle, you will need to pay back a substantial amount of capital at the end of the contract. Especially since all the money invested in the vehicle will not allow you to enjoy it later to buy a new one, which will surely encourage you to contact credit. Finally, you will also have to perform the maintenance of the vehicle at your expense.
The balloon credit is especially suitable if you have a habit of changing cars regularly to take advantage of the latest models for sale!
Compare different credit offers
In order to find the best Elliot family meant to acquire your new car, the best solution is to compare consumer credits. In just a few minutes you will have to answer a few questions about your need and your profile, you will have access to several offers of car credits in order to buy your vehicle in all serenity.
Remember that there are many attractive offers on the market and it is sometimes difficult to see clearly and understand all their features. It is, therefore, necessary to take your time to fully understand all offers and performing a credit simulation car directly online on Elliot family.fr.