What is a car loan?
A car loan is a personal installment loan with which you can pay for a new or second-hand motorized vehicle on four wheels. Other than the name suggests, other vehicles such as a motorbike are usually eligible for this loan.
When you take out a car loan, you take out a consumer credit with a bank or financial institution. This allows you to immediately withdraw the necessary money for the purchase of a car. After this, you pay off part of the capital each month, together with the interest on that amount.
Do you want to buy a new car or do you need a larger car because the family is expanding, but do you not have enough reserves or would you rather not get your savings ? Then this loan may be an option for you. Compare all offers for free and easily via our car loan simulation.
Which vehicles can I buy with a car loan?
As mentioned, several vehicles are eligible for a car loan, such as: (electric) car, van, truck, van, caravan, mobile home and an electric bicycle. The vehicle you want to purchase may be either new or used, run on diesel or gasoline, be hybrid, LPG or ecological, or be a family car or city car.
At many banks, a car is considered new if it is up to two years old. So if you buy a second-hand car that has already driven on public roads, but is less than two years old, you will enjoy the same car loan conditions as you would with a new car. At certain banks the limit is three years to be classified as a new car.
An ecological car is a car with low CO2 emissions. The emissions from these types of cars are lower than the 160 g CO2 emissions of a diesel car and also lower than the 145 g CO2 emissions for a petrol car.
In general, banks offer a lower interest rate for new, electric or ecological cars than for a second-hand car. For a new car, the interest rate of a car loan is usually between 1% and 3%. For a used car this interest can vary between 3% and 10%. It is in any way to your advantage to carry out a car loan simulation online, whereby you can also vary the borrowed sum and duration for all banks in Belgium, and thus see the precise difference in interest.
How does a car loan simulation work exactly?
In general, the amount that you can borrow for a car is between € 1,250 and € 150,000. With most banks it is possible to borrow up to 110% and sometimes even up to 120% of the purchase price of your car. You are allowed to do this so that you can also use this loan to pay the tax on the entry into service or car insurance. However, this percentage varies from bank to bank.
The duration is usually between one year (12 months) and ten years (120 months). The duration depends on the purchase price of the car and also on your repayment capacities. The shorter the term, the lower your interest rate and the lower the total costs of your car loan.
In addition to the fact that the interest rate of a car loan differs depending on the type of vehicle, it also depends on how much money you borrow and the term of the loan. For the same amount, it is therefore interesting to adjust the term in the car loan simulation to see if this means that the interest rate cannot turn out to be more advantageous.
By comparing car loans, you get a better idea of the total costs. This way you can adjust your final choice to your own repayment capacity.
Can I enjoy a tax advantage when purchasing an electric car?
Since 2014 you can no longer enjoy a tax reduction for cars, breaks and electric vans. This also applies to charging stations. Only motorcycles, new electric tricycles and new electric quadricycles can still enjoy tax reductions. For more information about this, it is best to consult the website of the FPS Finance.
Can I use the money from my car loan for other things?
Unlike a personal loan for all purposes, a car loan is seen as an assigned credit. This means that the amount borrowed can only be used to finance a new or used car. That is why the bank also asks you for an order form or invoice for this vehicle as proof. Without this order form or invoice, the bank will not allow you a car loan.
Indeed, the purchase of the car and the issue of a car loan are inseparable. If the dealer or person from whom you bought the car does not deliver the car or cancels the purchase, the car loan is void. This also applies in the opposite direction: if you cannot find a bank for the purchase of your car that you want to allow a car loan, you can cancel your purchase agreement free of charge. This explains why you only start paying the bank back when your car is delivered.
Can I request a personal loan for all purposes to purchase my car?
For your car financing it is possible to request a personal loan for all purposes. Such a personal installment loan is more flexible than a loan for a car, since you do not have to submit an order form or invoice with the first option. You must also not justify the use of the borrowed amount and the size of this amount.
However, the personal loan for all purposes has two disadvantages:
1. A higher interest rate: the interest rate of a personal loan is generally higher than that of a car loan. This difference is often at least 4%.
2. A less protected borrower: with a personal loan for all purposes you will still have to pay your bill if your car is not delivered.
Car loan simulation: why should I use OneTopNotch?
Comparing car loans brings all kinds of benefits:
– You can quickly find the best offer. The banks often change the interest rates on car loans. By performing an online car loan simulation, you can find the most up-to-date interest rates quickly and for free.
– You save time: you no longer need to go to a broker, agency or bank to perform a car loan simulation to know how much money you can borrow.
– You have a complete overview of the market and all necessary information about every bank and every offer in order to make a decision suitable for your personal situation.
How can I compare a car loan?
Do you want to borrow for a car? Then first compare all car loans in Belgium to find the cheapest offer through the free car loan simulation on our website. To do this, simply enter the amount you wish to borrow and the term for which you want to repay this amount. You will then immediately see all simulation car loans from Belgium in the table. You get an exhaustive list of all banks and financial institutions in Belgium, but you can always check or tick specific banks in the table on the left of the page. You can compare more than just car loans in the table. You can calculate the interest and monthly repayment and you will see the total amount that you will have to repay.
How can I apply for a car loan?
Know that a loan simulation does not immediately commit you to the actual closing of a loan. Once the online request has been sent, the bank will contact you and send you a contract. You will then have to sign and return this contract. It is only when you have signed this contract that you have officially taken out a loan with the bank and that you will have to respect the payment conditions.