Auto Loan and Overindebtedness, Good Practices

From time to time, we need to change cars. This for one reason and another. Sometimes it’s a necessity. Maybe the use of our car has already greatly influenced its condition. Sometimes it’s just envy; a new model makes us crack or a new brand is more resistant than ours.

Only, we do not always have the personal means to finance this change of automobile. Thanks to the development of the commercial world, we can use several means of financing to have the car we need under certain conditions of resources. Indeed, we have auto credit.

Auto forms of credit

The term is assigned to consumer credit. It results in a trade name relating to several forms of auto financing. We can opt for the personal auto loan. This one is mainly used to buy a used car.

For this type of loan, justification with a financial institution is not mandatory. Yet, if ever a problem arises, we still have to pay the car loan. Because of this, it is not very interesting. We also have the credit assigned auto.

This type is directly related to the acquisition of a new car. In the event that the vehicle is defective or not delivered to us, we are not obliged to refund the credit. So, it is more interesting than the first type of loan.

Certainly, with this type of credit, the refund starts simultaneously with the acquisition of the vehicle. Among other things, we can opt for balloon credit. It allows us to change cars in a regular way. In this case, we do not refund the full value of the vehicle.

Also, we can acquire the latter definitively. Among others, we have the LOA or the Lease with Purchase Option. As the name suggests, it is possible to also acquire the vehicle at the end of the rental period. This definitively. This financing solution is widely used.

It is offered by dealers or specialized credit institutions. Last type of auto loan, LLD or Long Term Rental. This is a financial formula to pay for renting a new vehicle. Unlike the LOA, we can not dispose of the vehicle permanently at the end of the rental period.

Over-indebtedness and good practices

Auto loan and over-indebtedness

Over-indebtedness is a situation in which a person is in debt. In this case, he can no longer meet his deadlines. It’s a difficult situation. The origin of over-indebtedness can be unemployment or retirement.

Finally, all the situations that push us to get into debt regularly and that prevent us from making the repayment. In general, it does not allow us to find other funding when we are completely in need.

As part of the auto loan, we can always have the vehicle we want. We only have to adopt some good practices. Firstly, we must appeal to the municipal center of social action or the CCAS of our city. This is to meet a social worker who will analyze the situation and help us out of the hostel. It will also negotiate to obtain a staggered amounts due with a schedule.

In general, the latter is done amicably. Then you have to file an over-indebtedness file. Some information must be provided in order to have the credit. However, everything is possible so that we have a vehicle.

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