Knowing how to calculate the interest rates on a vehicle finance is crucial if you intend to buy a car for this type of credit. Vehicle finance is one of the best credit options for buying a car. The latest reports from the Central Bank indicate that interest rates on a loan may vary by up to 8% per month.
This variation can represent a large weight for the value of the monthly installments and the total value of the car. Choosing the right bank to finance is an important decision to save on the value of the vehicle. Before choosing an option, simulate financing by multiple companies and check rates to make a comparison before closing the deal.
What should I check for vehicle finance calculation:
The collection of interest in excess of the market price
Financial institutions are free to practice the value they consider ideal within their conditions. The amount is applied according to the risk of default, according to the credit analysis made by the bank in relation to the consumer. What can be done by the consumer is an analysis to check if the interest rates applied are on average or above market rates. If the interest rates are above average they may be considered abusive.
Compare compound interest
It is necessary to observe how the financial company uses the PRICE table to calculate the financing installments of a vehicle, which implies the accumulation of interest on interest. You can check if the funding uses the PRICE table by means of online simulators.
How to calculate the rate of a vehicle finance?
To calculate the interest on a vehicle financing, you must know the interest rate applied by your bank. In short, to know the weight of the interest rate on the final value of a loan, you need to use the highest and lowest rates, according to the interest rate published by the Central Bank, with information from the main financial institutions in the country.
Don’t be on impulse as you can get double the amount funded if you don’t make a good consultation. Before closing the deal, do market research to make sure you have chosen the best credit solution for you.
How to choose a good vehicle finance?
- Check out some tips to help you buy a car for financing and not get in a loss:
- Give as much input value as possible;
- Do not finance the values of IPVA or insurance, because this weighs more the value of financing;
- Do not finance with installments that commit more than 20% of your monthly budget;
- Do not get a loan that will be paid in more than 4 years, due to the depreciation of vehicles. The ideal is to finance the vehicle within 3 years (36 months);
- Research the financing with the best interest rate.