Taking out a loan for getting extra cash is not a bad idea. You might require money for some additional expenses and taking a loan would be your best option. There are two most common financing options existing in our world today, the personal loan and the car loans. Opting for this loan is this quite easy if only you can meet with their demand. Some personal loans are even processed online, while some car dealers offer car loans with ease.
Most people are not acquainted with the difference between a personal loan and a car loan. In the case of a personal loan, it can be used for servicing personal expenses, while for a car loan, it is strictly for the purchase of a car. This is why taking out a car loan for the purchase of a vehicle solely is advisable. Still, for other spending purposes aside from getting a car, a personal loan is considered inappropriate. In this article, we shall talk about the personal loan and the car loan, including the pros and cons associated with them.
The Personal Loan
A personal loan is a loan given to a borrower from a financial institution for his priorities. There are secured personal loans and unsecured personal loans. A personal loan can be guaranteed against something that has a value such as a house or a piece of landed property. An unsecured personal loan is a loan-free from collateral. This is the type of loan people opt for more.
The Car Loan
A car loan is a loan taken against the vehicle you want to buy. If you fail in repaying the loan, the lender has every right to seize the car. Repayment of the loan is made in instalment throughout the loan period.
A car loan is just like a mortgage in which the lender still owns the property until you the payment of the loan. Most people prefer going for car loans other than to Pledge a Car on finance (รับจำนำรถยนต์ติดไฟแนนซ์ ,which is the term in Thai). The interest rate on the car loan is low as the lender has financial advantage on the car. Also, the terms and conditions of the car loan are not as strict as personal loans.