If you are thinking about changing your car or fulfilling your dream of buying your first car, you should be researching various brands, models, prices, comparing the cost-benefit of new versus used cars, and several other things. But, if you didn’t save money or don’t have another car to pay for, one of the main concerns is being “how am I going to pay” and, in these cases, the most popular solutions are title loans in florida or financing.
The advantage of consortia is that they do not charge interest, you only pay the monthly fees to compete for the prize, which, among several assets, can be a vehicle. The more monthly fees you pay, the more chances you have to be covered and, therefore, it may take years for your new car to arrive, which makes this solution impractical for those in a hurry to purchase a car.
Since the financing of vehicles is usually the first option that comes to mind when buying your new car, have interest rates that, depending on the amount financed and the financial credit approval system you choose, can be very high.
But, you still have a third possibility that is not often mentioned but can be quite attractive: how about taking out a loan to buy the car? That’s right! A title loans in Florida can be a great solution to resolve this issue.
Is it better to borrow or finance?
When you take out a car title loans in Florida, you take out credit, through a bank or financial institution, to buy a good. The main difference between the two solutions is that, in the financing, the available amount has a specific destination, when making a loan, you can use the money to buy a car, motorcycle, or property (as in the financing) and use it for several other things, like starting your own business, paying off debt, organizing your financial life or how you prefer.
The main advantage of taking out a loan is precisely the convenience of being able to use the money as you wish. Also, you can split the entire value of the vehicle, while in some financing you need an entrance fee.
In the case of financing, the advantage is in the interest rate, which is usually lower, since the financial institution can use the vehicle itself as a guarantee of credit in the event of default. But, there are also some very secure loans with low rates, such as payroll loans and loans with the secured property.
What is the cheapest type of loan and the best option?
Knowing that, when taking out a loan, you have the convenience of being able to split the full amount of the vehicle, use the money as you wish, and still have modalities that offer very competitive interest rates, the question that remains: what is the best loan?
As we mentioned above, among the loan options that have the lowest interest rates on the market are payroll loans and loans with property guarantees. Both solutions can offer super competitive rates because in both situations, banks or financial institutions have a lot of security in trading and therefore they do not need to charge abusive fees. Now, let’s give you more details on each of these loan models:
Payroll loans
This loan model, in general, is intended for public servants, retirees or pensioners, or employees of companies that have ties to a financial institution. The loan amount can correspond to a maximum of 30% of your income and is available on a payroll credit card. The installments are discounted directly from the contractor’s benefit or salary, which provides low-interest rates.
A very important detail is that the loan for public servants or CLT workers is done by the bank or financial institution associated with the institution where you work, but it is also possible to make the portability of credit. The problem is that this process is bureaucratic and is also not guaranteed because you need to find a financial company that wants to absorb your debt.
Another issue to think about is that, due to the amount deducted directly from the benefit or salary, if you have any unforeseen circumstances.
Property secured credit
The property-backed loan, as the name implies, uses a property as collateral for the payment of the credit. Therefore, the finance company has a lot of security and can offer very competitive interest rates. In addition to low-interest rates, other great advantages of this type of credit are that you can use the car title loan in florida as you like, you can have the amount available in up to ten days, and have a long term for payment: up to 180 months.
Another important advantage is the available limit. Because it has a high-value guarantee, the credit limit released is also high, usually from R $ 30 thousand, which is perfect for buying a zero car. Also, as with payroll loans, the value of the installments can only consume 30% of your income, which changes the number of installments in the negotiation, but ensures that you will not compromise your budget too much.
Don’t forget to compare your car title loan options well. The most important thing when choosing the modality, besides the interest rate and the number and value of the installments, is to know the total Effective Cost, which is the total amount you will pay for the credit.
