Who needs a car loan, must make numerous decisions: Does the loan to buy a new or a used car? What should the loan amount be? Do you turn to a German bank, a foreign bank or a specialized car bank? In order to be able to find a reasonable basis for these important decisions, most people study the different offers very closely and always get an interesting hint: whether it is a car loan with fixed interest or not.
The car loan with fixed interest: A small interest theory
Anyone who has never dealt more deeply with interest rates will be confused at the first contact, because he has three words around his ears that he can not match: the fixed borrowing rate, the annual percentage rate and the fixed interest rate. Occasionally you can also meet the credit-based interest rate, which should not concern us here but further, as it merely states that the interest rate is calculated on the income. The bound borrowing rate describes the interest burden per se. Put simply, this is the profit margin that a bank wants to make if it lends money. The annual percentage rate of charge is the real burden on the customer when borrowing because it still includes the fees that are due for a loan. But when is the car loan with fixed interest now?
The fixed-rate car loan: the dangerous game of words
When answering this question, the opinions of the customer and the bank can differ significantly. The customer has a clear picture of what a fixed rate is: he pays a constant interest rate for the entire loan term. In the language of the bank, this means: The APR is the one that can not change. However, a bank with a fixed interest rate can also understand the committed borrowing rate and, as a result, the annual percentage rate may well change.
The car loan with fixed interest: play it safe
As a result, it is advisable to hedge yourself. Fortunately, this is usually quite easy, as most banks also issue a fixed rate bond from time to time. Then you can be sure that it means the annual percentage rate. In addition, banks also issue so-called interest rate tables, where you can see the interest rate per term. With these one has then immediately the overview, whether the annual percentage rate under certain conditions changes or not and can thus immediately see whether it concerns a car loan fixed interest or not.