 |
Product Search
|
 |
|
Article Search
|
|
|
Resources
| |
|
Home > Are There Balloon Loans For Purchasing Motor Vehicles?
We Have Found 8 Products for your search of Are There Balloon Loans For Purchasing Motor Vehicles?.
Displaying Items 1 - 8:
Are There Balloon Loans For Purchasing Motor Vehicles?
by Jess Peterson
Though not common, there are balloon loans for purchasing motor vehicles and though the lender might be harder to find, qualifying for these loans is just as easy as qualifying for regular motor vehicle loans.In the following paragraphs we will analyze Balloon Motor Vehicle loans and explain why would someone want to request these loans. Truth is that under the right circumstances many can obtain their desired motor vehicle to start or run their own business and sometimes without a previous suitable income other types of loans would not be affordable. The money needed to make the purchase, then, wouldn't be available either.
Balloon Motor Vehicle Loans: How They Work?
Just like with balloon mortgage loans or balloon car loans, these loans provide all the funds needed to purchase the vehicle, the loan is then secured with the vehicle which has to be turned in to the lender in case you fail to meet the monthly payments (repossession). Thus, there is little risk for the lender and the terms of these loans tend to be quite advantageous. However, these accounts only to the fact that these are secured loans. Let's analyze what makes them different.
Ballon loans are loans that do not require the whole repayment of the capital along the repayment program. Instead only a portion of the principal is included in the monthly payments and sometimes the monthly installments correspond only to the interests generated by the capital. At the end of the repayment program, however, a balloon payment has to be done and the principal of the loan needs to be repaid in full.
Of course, it is possible, at that point, to refinance the remaining balance (the principal) and exchange the balloon loan for a regular motor vehicle loan. However, this would increase the amount of money spent on interests and should only be done if you can't repay the loan and you don't want to suffer repossession of the vehicle.
Why a Balloon Motor Vehicle Loan?
People who can't afford regular monthly payments or need to start a business which needs a motor vehicle, can't make good use of these loans because for a long period of time they will only have to pay small monthly payments when compared to the monthly installments of regular motor vehicle loans. This will provide them with ease to start generating income to afford either a refinance or the balloon payment at the end of the repayment program.
Once the repayment schedule ends, the borrower will either be able to repay the loan's principal or at least agree with the lender a new repayment program with installments that will include, this time, a significant part of the principal (regular motor vehicle loan). However, if the borrower fails to repay the amount owed, the vehicle might get repossessed. Therefore, it is important to budget properly to avoid such situations.
---
About the Author
Jessica Peterson writes finance articles yourloanserv... for Yourloanservices.com where she shares her knowledge about how to get money for a starting-up business, consolidating any kind of debt, repairing a home even with a bad credit history and more.
Excel Finance Trick #8: Complete Loan Analysis
See how to use the PMT and RATE functions for a complete Debt/Loan Analysis.
Debt Analysis with input variables: % Down Payment, APR, Years, Points, Extra Fee. See how to calculate Amount to Borrow, Monthly Payment, Actual Cash Received, Adjusted APR, and PMT w Balloon Payment.
In This Series learn 17 amazing Finance Tricks. Learn about the PMT, PV, FV, NPER, RATE, SLN, DB, EFFECT, NOMINAL, NPV, XNPV, and the CUMIPMT functions that can make your financing tasks much easier in Excel. See how to use the PMT function in the standard way, but also see how to use it while incorporating a Balloon payment or a delayed payment. Lean how to translate a Nominal interest rate into an Effective Interest rate. Learn how to calculate how long it takes to pay off a credit card balance. Lean how to calculate the Effect Rate on a Payday loan. And many more financing Tricks!!
The Excel Finance Tricks 1-17 will show an assortment of Excel Financing Tricks!
Formula
|
|
