These loans are available in both secured and unsecured forms. In case of the secured loans the rates of interest are on the lower side because you have to keep collateral against the loan amount. This security is in the form of the car that you purchase. The lender keeps the papers of the car as security against the loan amount. The rate of interest in this case amounts to 5% to 8%. But in case of the unsecured loans you don?t need to keep collateral as security against the loan. That is the main reason the rate of interest being lower. The other advantage that you can derive from these unsecured loans is that the lenders do not perform any credit check before giving the loans. Thus you can get hold of a loan even if you have a poor credit history in the past. The rate of interest in this can go as high as 8% to 12%. You should know the loan application thoroughly before opting for any specific loan as it is very important to know the loan quotes in order to get the best deal from the lenders.
The terms for the loans is usually spread for a period of 12, 24 and 36 months. The thing that you need to keep in mind before applying for the loan is the interest rate that the companies are offering you at the present moment. The amount of interest is usually higher if you opt for a shorter tenure loan. But in case of a loan that has longer tenure will carry a lower monthly repayment but at the end of the day you will end up paying more by way of interest. For example in case of a loan that has tenure of 60 months you will have to pay $12000 for interest which amounts to 6.39% of the loan amount. On the other hand the loan having tenure of 36 months will carry a rate of interest amounting to 5.34%.
