Member car loan – What is this?
Being passionate about a new car is something very natural.
Who is simply not interested in buying a new nice car? Then to go ahead and buy a car is something quite different from being a little cranky. But if you are going to buy a new car and are a member of some trade union, it may be interesting to know that you can often get a more favorable loan. The loan you aref can apply for is usually called a member car loan.
Does the union have an agreement with the bank?
The first thing you need to do is check if your bank has an agreement with the union that you are a member of. Different banks have agreements with different unions. If your regular bank has no agreement with your union, it is worth checking out other banks to see if they have a member car loan that works for you.
Benefits of membership car loans
Basically, a member car loan is the same as a regular car loan. What makes a member car loan a better loan than a regular car loan is that it is usually cheaper. The interest rate is often at a lower level and it may also be that some other fees, such as setup fees, disappear.
How a member car loan works
As we wrote earlier, a member car loan basically works like a regular car loan. This means that you can normally borrow up to 80% of the car price. The remaining 20% of the cost can be paid in cash either through money you have or obtain otherwise or by exchanging a car that generates the money required.
The repayment period is then usually somewhere between 2 and 7 years. You can usually decide how long it will be for yourself, what can affect both your finances and the age of the car. If it is not a very special car to buy, it should also not be more than 12 years when the entire membership car loan has been repaid.
Furthermore, in order to apply for a member car loan, it is usually required that the car you buy is sold by an authorized car dealer. If you want to buy a car privately, you instead have to buy a regular private loan to finance the car purchase. You must also have been a member of the union for at least 6 months to apply for a membership car loan.