loader

Knowing the difference between personal loans and car loans: Which is cheaper?

By


Posted on Feb 11, 2019


loan

 

There are cases when something of value cannot be easily purchased due to some financial restraints.  In this state of the economy, no matter how much you put in, income doesn’t come easy as it should be. If you are in the market for a significant lifestyle purchase, for example, a brand new laptop, a digital camera, or even a car, somehow, the easy answer might be to avail of a loan to aid its purchase.

The thing is, financial institutions have a wide array of loan products and services that will confuse people for what it is intended for. Some loans like housing loans are suited best for people that would like to invest in real estate or houses wherein the financial payments are flexible, secured with collateral and longer regarding duration. Also, you have personal loans that are quick to avail, with minimal requirements to comply but stacks on interest rates and shorter in length.

Now, if you are planning to purchase a car, you might want to consider the option of availing an Auto Loan. These loans are created for the intention of providing financial assistance for a vehicle. To help you with your decision of choosing between, here is a general breakdown of what personal loan and car/auto loan are:

 

personal loan

Personal Loan

Concerning payment, some personal loans require payment of a lump-sum at the end of the loan duration or fixed monthly, bi-monthly, weekly or yearly payments. Financial institutions don’t usually need you to identify what the purpose of the loan is. It is up to the borrower how to spend or what to spend it on. Personal loans can either be secured or unsecured. If you opt for a secured one, you pledge any asset of value like a piece of jewelry or a house if defaults occur. For you to avail of a personal loan, an excellent credit score is needed and prepare for a drowning list of requirements to comply. At the top of that, interest rates are more expensive than any other loan. The benefits of availing this loan are that you have the right to whatever you will do with the borrowed money and repayment schedule is flexible. The downsides are higher interest rates, more difficult to qualify and an excellent credit score is needed.

car loan

Auto Loan

On the other hand, it is a secured loan, which means that it is likely that your car will be the asset to back the loan. If any form of defaults happens, the financing institution can seize it. Repayment terms are made in installments that can last up to 15-20 years. Interest rates are comparatively lower than a personal loan and are fixed. The benefits of a car loan are that its interests are more economical than a personal loan. Qualifications are much easier than a personal one, and most of the time, it’s the most viable option for the purchase of a car. However, the ownership of the vehicle remains to the financial institution or lender until the loan is fully paid and an initial down-payment of at least 20-30% of the car’s amount is required.

If you are still confused as to what loan will be the most advantageous one for your financial health, take the time to go to various financial institutions and ask about each loan with them. They can give you a realistic summary of your cash flows and how a loan would affect it. This will ultimately guide you to decide what the best is for you. 

 


Read Also:


  • Car GPS Tracker
  • UCCP EON PILIPINAS
  • Sportline Tuning & Style Magazine Auto Show
  • UCCP Lord of the Wheels
  • DISTAS 2017 District Assembly
  • All About Wigo 1st Anniversary
  • What is TPL or CTPL Car Insurance
  • What is Comprehensive Insurance?
  • Anti-Distracted Driving Act (ADDA) effective TODAY July 6, 2017
  • Choosing the Cheapest Car Insurance
  • Car Insurance Philippines
  • List of Traffic Violations in the Philippines
  • Do I Really Need to Buy Car Insurance?
  • Top Fuel Efficient Cars
  • Bank Financing Insurance Penalty
  • Car Registration Renewal in Philippines
  • What You Must Know About Plate Issuance
  • Self-driving cars: Changing the world, one road at a time
  • 4 Things to Do When Your Car is Towed
  • What Would Happen if you Flee from a Traffic Enforcer on Duty
  • How to Deal with Christmas Rush and Avoid Traffic
  • How to Maximize Fuel Efficiently
  • Cleaning Different Types of Steering Wheels
  • License Renewal in Philippines
  • Different Types of Fuel
  • Car Loan Applications: Tips and Tricks
  • What does kilometer post mean
  • Types of Drivers License in Philippines
  • Proper use of side mirror while driving
  • How To Determine Car Registration Expiration
  • How to Avoid Car Accidents
  • How to Change Car Oil
  • Traffic Sign or Road Sign
  • What will you do when you got into car accident
  • Chattel Mortgage for a Car Loan: What Is It and Its Benefits
  • Basic Car Maintenance to Learn
  • Knowing the difference between personal loans and car loans: Which is cheaper?
  • When To Replace Headlights
  • Commuter Carpool Saves Time and Money
  • Why refrain from making modifications to your car
  • Embrace the Art of Eco-Driving with These Steps
  • How to be a SaferDriver
  • The crash of five car dealership outlets amidst coronavirus
  • Change in bus routes under GCQ
  • Fate of PUJs under GCQ
  • Manual vs Automatic Cars: The Best For The Road
  • Diesel vs. Gasoline: What Factors Should Matter?
  • Car Blessing in the Philippines
  • Understanding the Different Types of Car Insurance
  • Stay Protected with the Right Car Insurance Policy
  • How to Get Your Car Blessed in Antipolo and Manaoag
  • Most Commonly Ignored Road Signs and Why It Shouldn’t Have Remained Ignored
  • Things you need to know before taking the LTO Exam
  • LTO Reviewer (Tagalog)
  • Why Left Lane Hogging Should Be Avoided
  • What is the meaning behind the driver’s license restriction code?
  • A Guide on How to add Restriction Codes to your Driver’s License
  • A Detailed Guide On Comprehensive Car Insurance
  • Why Do You Need Car Insurance Participation Fee
  • Guide on how to get Autosweep and Easytrip RFIDs
  • Why you should consider getting an RFID
  • Flooded Car? Here Are The Things You Should Do if Your Car Gets Caught in A Flood
  • Tips and Tricks for Washing a Flooded Car
  • Step by Step Guide to Insurance Claims for Flooded Car
  • Knowing Your Wheels: Differentiating SUV, AUV, and MPV
  • How to load your auto sweep / easy trip RFID
  • Why Car Plate Took So Long to Release?
  • When is the best time to renew car insurance?
  • Best Payment Option for You When Buying a Car
  • Safety First: The Crucial Duties of a Car Owner Through Safeguard Duty
  • Vaccination cards can now be used for local travel
  • Is Less Fuel More: Full Tank vs. Half Tank
  • Is It Bad to Turn Off Car Engine Immediately After Parking?
  • A Beginner’s Guide to LTO Online Driver's License Renewal and Registration
  • What is PMS in Car?
  • A Refresher: Number Coding Scheme in Metro Manila
  • A Detailed Guide on Where to Buy 2nd Hand Car in the Philippines
  • Declared Regular and Special Non-working Holidays for 2023
  • A Beginner’s Guide on How to Parallel Park a Car
  • How to Make Your Car Engine Rat-free
  • Traffic Update: A Detailed Guide on LTO’s Online Portal
  • An Ultimate Guide To Things To Do In Case Your Car Gets Flooded
  • What is the difference between Third Party Liability and Comprehensive Car Insurance?
  • How To Extend The Life of a Vehicle
  • The Ultimate Guide to Understanding Car Insurance: Everything You Need to Know
  • Shifting to the Single Ticketing System for Traffic Violations
  • 9 Reasons Why Car Insurance is a Must-Have for Every Driver
  • What is a Hybrid Car?
  • What are the Benefits of Using Electric Vehicles in the Philippines?
  • Acts of God: What You Need to Know About Car Insurance Coverage
  • What is Lemon Law in the Philippines? | How Do They Work
  • A Detailed Guide on the LTO Car Registration Requirements
  • Philippine Expressways Set for Seamless RFID Integration: TRB's Interoperability and Cashless Drive
  • Fuel Price Rollback: A Welcome Relief for Drivers
  • Safe Driving Tips for Holy Week Travel: Ensuring Peace of Mind with Car Insurance
  • House Bill Proposed to Increase Third-Party Liability Claim Limit for Commercial Vehicles
  • Navigating Metro Manila's Holy Week Road Works
  • Benefits of Having a Dash Cam on Your Travel
  • Fire Incident Damages 19 Vehicles at NAIA Terminal 3 Parking Lot
  • Acts of God Car Insurance Coverage: What It Is and Why You Need It
  • NLEX Toll Rates to Increase Starting June 4
  • Two southbound lanes on Mindanao Avenue will close starting June 29.
  • Common Causes of Car Accidents
  • 5 Essential Steps to Prepare for Natural Calamities
  • The Consequences of Driving Without Insurance
  • Why Filipinos Need Acts of God Coverage
  • A Complete Guide to Filing a Car Insurance Claim in the Philippines
  • Essential Car Care Tips for the Rainy Season
  • Save Big on Car Insurance in the Philippines
  • Can I Buy Car Insurance Online? Here’s How to Get Started
  • How Do I Get a Car Insurance Quote Online
  • Toll Regulatory Board Approves Updated Toll Rates for NLEX Connector