With the online application you can decide whether to take a classic car loan or our Smart Car loan with a final installment (balloon financing), select the desired loan amount and term and have your credit calculated. The customer can assemble almost exactly his desired loan by this calculation. The classic includes the classic car financing with constant monthly installments until the repayment of the loan. The budget version of the car loan is a loan with a final installment that allows for smaller monthly installments. With a car loan with a final rate, the dream car can be possible.
Calculate the last installment of the car
If you finance a car with a final installment, you should calculate the final installment. The calculation of the last installment for a car will only incur a small monthly fee during the term. In most cases, an expected value of the vehicle is determined by both parties, the vehicle buyer and the vehicle dealer. The last installment should then be covered by the car sales.
Very few car buyers can spend money on a new car or used car. For the calculation of the final rate of a car, the sum of the payments to be made is just as important as the effective interest rate. In addition, vehicle buyers can obtain additional product information and other valuable information. With a purchase amount of USD 10,000, the most favorable loan amount is available from Intrasavings-Bank with an annual percentage of 1.90% and a lending rate of USD 174.77.
For online credit comparison here is an interest of 5.90% and a loan rate of 192.15 USD. To give the loan seeker a better insight, the car loan comparison should be selected. At a glance, you can see not only the loan amount, but also the terms and monthly installment and the effective annual rate.
A car loan can last from 12 to 48 months, often more. Due to the currently favorable interest rate, the duration of the motor vehicle final installment can be chosen over a longer period of time. On the one hand is the balloon financing, then the three-way financing or the classic installment loan. For balloon financing with a final installment, low monthly installments are paid during the contract period.
The disadvantage, however, is that at the end of the term a higher graduation rate must be paid. Balloon financing does not require advance payment, while prepayment is required for three-way financing. The calculation of the last installment of the vehicle with a three-way financing is at the beginning of the financing project. The monthly installments pay off in the three-way financing, but also in the balloon financing at all, but the last installment must be paid in the end in full.
The final installment is the amount of a regular installment plus the final installment at maturity. With the help of a hand calculation for the final rate this could be determined with the Credit Calculator. With the new credit calculators so the final price can be calculated by the calculator, but also specified. Loan seekers should know at a car’s closing price that only a higher completion rate (as a balloon) will differentiate between balloon funding or three-way funding.
The remainder will not be repaid during the term of the contract, so the full interest has to be paid. A vehicle financing of USD 20,000 with a term of 36 months at an effective interest rate of 5.99% per year is offered. Car buyers can choose between the classic installment loan and the balloon financing. For installment loans, the principal pays 36 installments of USD 607, resulting in a total fee of USD 21852.
The loan amounts to 20,000, after which financial expenses in the amount of 1852 USD are incurred. In balloon financing, our clients pay 362 USD over 36 months. This results in a total amount of 13032 USD. The final amount is USD 10000, resulting in a total cost of USD 23032. After deduction of the net loan amount, the expenses amount to 3032 USD.
Installment loans or balloon financing – what is better?
As mentioned above, a normal installment loan can be much cheaper than balloon financing. For the latter form of financing, an advance payment and a higher completion rate are required at the end of the contract period. The vehicle passes into the possession of the customer after payment of the last installment. The difference between three-way financing and balloon financing is shown in the terms and conditions for advance payments, partial payments and final payments.
When the car is returned after the travel time has expired, possible errors can lead to additional costs. However, such a funding option should only be selected if provisions for the last installment can be made at the same time as the monthly charge. Especially when you consider that buyers can then choose another vehicle that would otherwise have been too expensive.
The final amount depends on the vehicle value it still has at the end of its normal use. Consequently, after a period of two years, the impairment loss of the vehicle will be less than a period of five years. This means that the final rate is lower in the short term than long-term funding.
Do I have to pay the last installment immediately? At the end of the period, the last installment must be paid if it can be repaid from the saved reserves. Most of the time, a classic loan is used to pay off the last installment. However, the terms of the loan are negotiated only when the last installment matures.
The car can also be returned. This is similar to car sales because only the actual vehicle value is paid out. If this is lower than the last installment, the customer must pay the balance himself.