Winking-cavy exists in order for you to get all the information you need about your possibilities to finance a car through a loan, and to inform you on what you need to keep in mind when taking a loan. On this page, we provide you with a clear overview of the different types of loans there are. Several of the following aspects are discussed on some of our other pages, however here you will find a summary of the most important aspects behind each loan.
Different types of loans
- Loans with security
If you’re looking to loan money for a car, boat, motorcycle or similar, you are generally speaking allowed to loan 80 % of the vehicle’s value. You are required to make a down payment for the remaining 20 %, and the car (or other assets) that stands as security can be taken away from you if you’re unable to repay the loan. The car has to be bought from an authorized dealership, and can’t be too old. Make sure that you are aware of for example arrangement and notification fees that make up the effective rate. The effective rate consists of all the costs the loan will bring, and thus represents the real sum that you will have to pay. The entity that loans you money will check your credit history in order to evaluate your ability to repay the loan.
- Unsecured loans
Here you are allowed to loan money for pretty much whatever you want. For example, you can take a loan with security for 80 % of the car’s value, and then pay the remaining 20 % through an unsecured loan, even if this isn’t recommended. The interest rate is usually higher than mortgage and secured loans, and your credit history will influence it, as with all other loans. You will be able to choose between two different payment plans, where one of them lets you pay the same amount each month, however the loan period becomes longer and the loan more expensive in the end, whereas the other is cheaper in total, but requires more money from you at the beginning of the period.
- Member’s loan
If you are part of a trade union or organization, you can be granted a member’s loan, where better loan conditions have been negotiated to favour the members. Apart from this however, the loan is no different than other loans.
- Mortgage loans
This is a loan you take to finance your property, no matter if it’s a smaller house, villa, an apartment etc. The max amount you can loan is 85 %, so a down payment of 15 % is required. You are able to take an unsecured loan for the remaining 15 %, however you shouldn’t loan amounts that go beyond your ability to pay.
- Instant loans
These types of loans go by several names, such as SMS-loans, payday loans etc. You loan a smaller amount during a shorter period, and because of often hidden costs, the effective rate becomes very high. Thus, if you turn to this alternative, you must make sure that you are aware of all the costs that applies, as the effective rate can be as high as several hundred or thousand percent.