Is a credit card installment or a loan suitable? Bibi will make it clear

Many people who are short of money will borrow money in two ways, one is credit card installment and the other is loan. Although you can borrow money, the fees incurred are different. For this reason, many people have been struggling with how to choose. So, is a credit card installment or a loan suitable? Here is a brief introduction for you.

Is a credit card installment or a loan suitable?

It can be said that if you can choose a loan, you should try your best to get a loan.

1. Credit card installment is easier to apply for, but the annual interest rate is relatively high. It is not calculated based on the installment rate given by the bank directly multiplied by the number of installments, because the actual time occupied by the credit card installment principal does not Not that long.

No matter how many installments you repay for a credit card, the handling fee and principal for each installment are fixed, and the handling fees will not decrease because the principal is repaid each installment. The real annual interest rate of a credit card is actually 2 times the book interest minus 1. For example, the real annual interest rate of the monthly rate is not that simple, but even higher.

2. The interest on a loan is easier to calculate. Generally, the monthly rate is directly multiplied by the loan period, and one year is multiplied by 12 months. And most loans still support borrowing and repaying at any time. Although you can choose the loan period when borrowing, the interest is calculated based on the actual number of borrowing days. However, you need to pay attention to the difference in interest charges between daily interest and monthly interest.

The daily interest calculation is calculated from the date of borrowing to the repayment date; the monthly interest calculation is to charge the interest of the current month, not the number of days of use in the month.

The above is the relevant introduction to "Is a credit card installment or a loan suitable?" Finally, I would like to remind you that everyone should make a choice based on their actual situation and real needs.

Which one is more cost-effective, credit card installment or car loan?

1. Compare cost-effectiveness from advantages and disadvantages

1. Credit card car purchase

Advantages: (1) The procedures are simple and the approval time is short.

(2) There are discounts available for car purchase with credit card installments.

(3) It is most convenient to pay a small amount (in line with the quota) directly with the lowest interest rate.

Disadvantages:

(1) The repayment period is relatively short, with the longest generally not exceeding 3 years.

(2) The applicant’s past credit requirements are relatively high.

(3) Each bank’s credit card loan has restrictions on car models.

(4) Credit card loans cannot be used to make down payments for car purchases.

(5) The credit card car loan limit is limited.

2. Car loan

Advantages:

(1) There are no restrictions on car models. No matter what kind of car, you can generally buy a car through bank loan channels.

(2) The loan amount is large, and the financing project for designated vehicle models has zero interest rate on a regular basis.

(3) The repayment period can be flexibly selected, and some can even last up to 5 years.

Disadvantages:

(1) The lending time is relatively long.

(2) Approval is troublesome, the requirements for loan conditions are relatively strict, and some even require real estate mortgage.

(3) The down payment ratio is relatively high. According to the application materials, you can generally only apply for a loan of up to 70%.

(4) The interest rate for car purchases is high.

(5) Non-civil servants can only apply for 3 years.

2. Compare the cost-effectiveness from the interest rate

Buy a car with a credit card: The lowest installment fee is 2.7% for 3 installments of credit card bills, 4.5% for 6 installments of bills, and 4.5% for 12 installments of bills. The lowest installment fee is 7.2%, and the lowest is 14.4% for 24 installments. The longer the term, the higher the interest rate, and the more fees you have to pay.

Car loan: RMB loan business issued by banks to individual customers for designated consumption purposes. It can mainly be used for consumer personal loans such as personal housing, cars, and general student loans. For consumer loans, bank base interest rates are: 5.6% for 6 months, 6% for 6 months to 1 year, and 6.15% for 1 year to 3 years.

Summary: From the perspective of the advantages, disadvantages and rates of buying a car with a credit card and a loan, it is recommended to use a credit card installment if the loan can be paid off within half a year. If it takes more than half a year to apply for a bank loan, it will be more cost-effective.

Which is more cost-effective, credit card installment or loan?

Which is more cost-effective, credit card installment or loan, depends on the situation. If the amount is not large, it is recommended to use a credit card. The cost of bank loans is low, but the procedures are cumbersome and you need to pay the time cost. However, if it is 100,000, a credit card is better. Credit card installment processing is relatively simple, but the fees are higher. Even if it is used in installments of several thousand yuan, the cost will not be much higher.

A credit card is a credit certificate issued by a commercial bank or credit card company to eligible consumers. A credit card is in the form of a card with the name, expiry date, number, cardholder name, etc. printed on the front. Consumers holding credit cards can go to specialized commercial service departments to shop or consume, and then the bank settles with the merchants and cardholders, and the cardholders can overdraw within the specified amount.

Loan refers to a form of credit activity in which banks or other financial institutions lend monetary funds at a certain interest rate and must be returned. A simple and popular understanding is that borrowing money requires interest. Through lending and monetary funds, banks can meet society's demand for supplementary funds, expand reproduction, and promote economic development; at the same time, banks can also obtain loan interest income and increase their own accumulation.

The "three principles" of loans refer to safety, liquidity and efficiency, and are the fundamental principles for commercial bank loan operations. Article 4 of the "Commercial Bank Law of the People's Republic of China" stipulates: "Commercial banks take safety, liquidity and efficiency as their operating principles, implement independent operations, bear their own risks, be responsible for their profits and losses, and are self-disciplined." 1. Loan safety is the key to business The primary problem faced by banks; 2. Liquidity refers to the ability to recover loans within a predetermined period or quickly realize cash without loss, so as to meet the needs of customers to withdraw deposits at any time; 3. Efficiency is the basis for sustainable operations of banks. For example, when issuing long-term loans, the interest rate is higher than that of short-term loans, and the benefits are good. However, if the loan term is long, the risk increases, the security is reduced, and the liquidity becomes weaker. Therefore, the "three properties" must be harmonious so that the loan will not go wrong. Interest refers to the remuneration paid by the borrower to the lender for the right to use funds. It is the use price of capital (that is, lent principal) during a certain period of time. Loan interest can be calculated in detail through the loan interest calculator. In civil law, interest is the legal outcome of the principal.

Which is more cost-effective, bank car loan or credit card installment car purchase?

Bank car loan is more cost-effective, and the repayment of car consumption loan is more flexible. Its maximum term can reach 5 years, and it can provide loan repayment methods with equal principal and interest, equal principal, more down payment or final payment, and less payment in the middle. It is much more flexible than credit card installments and is suitable for people with cyclical income. For people who often change cars, it is also a way to reduce the cost of buying a car.

Automobile consumer loans have much higher loan limits than credit card installments. Credit card installment car purchases are mainly targeted at individuals or families who are buying cars for the first time. Generally speaking, the upper limit of the installment limit is 200,000 yuan. Bank car loans can reach up to 80% of the car price, and the loan limit can be enlarged to 500,000 yuan.

Credit Card Installment Car Purchase Procedure

(1) Submit an application. After you are optimistic about the vehicle you want to buy, fill out the car loan application form and credit rating questionnaire, and submit them to the lending bank together with relevant proof of your personal situation.

(2) The bank conducts pre-loan investigation and approval. If the bank meets the loan conditions, it will promptly notify the borrower to fill in various forms.

(3) Notify the borrower to sign a loan contract, guarantee contract, mortgage contract, and handle mortgage registration and insurance procedures.

(4) The bank issues a loan (directly transferred from the bank to the car dealer's account).

(5) The borrower will hand over the down payment to the car dealer and go through the procedures for picking up the car with the passbook and the car delivery note issued by the bank.

What is the difference between buying a car with a loan and paying in installments?

1. Different definitions

(1) Loan to buy a car: The loan issued by the lender to the borrower who applies to buy a car is actually borrowing money from a financial institution to buy a car. However, financial institutions require car buyers to pay a certain percentage of down payment and provide proof of repayment ability. They must have no bad credit record and meet the requirements of financial institutions to apply for a loan to buy a car.

(2) Installment payment: It is mostly used in product transactions with long production cycles and high costs. Choosing the credit card installment payment method is more economical than bank car loans, car finance companies, etc. Usually credit card installment payment is free of guarantee and interest-free, and only charges a handling fee.

At the same time, when buying a car with a credit card installment payment, there are no mandatory requirements when purchasing new car insurance and renewal. Generally, you only need to purchase the main insurance and theft insurance.

2. Application conditions are different

(1) Loan to buy a car: To apply for a car consumer loan, you must purchase a limited range of cars from a special dealer approved by the bank. Car buyers must Having a relatively stable career and relatively stable economic income or owning assets that are easily liquidated will allow you to repay the principal and interest of the loan on schedule.

During the loan application period, the car buyer deposits a down payment lower than the bank's requirements into the account of the savings counter of the handling bank and provides the bank with a bank-approved guarantee. If the car buyer's personal account is not local, a joint liability guarantee should also be provided. The bank will not accept the mortgage set by the car buyer for the vehicle purchased with a loan.

(2) Installment payment: For the credit card installment payment method, banks will have higher requirements for applicants. Generally, they require an account in this city, stable income, no bad credit record, real estate, and high-quality bank customers. Better. It is easier to apply for installment payment. As long as the bank launches this service, car buyers can completely follow the rules of different banks.

Each bank has different approaches to installment payment. In addition to the products in the credit card installment payment catalog, some banks have specific requirements for purchase location and amount.

3. Different interest rates

(1) Loan to buy a car: The interest rate of a car consumer loan refers to the amount of the loan issued by the bank to the consumer, that is, the borrower, to purchase a car for personal use. proportion of principal. The higher the interest rate, the greater the repayment amount the consumer will have to pay. The current interest rate for automobile consumer loans is calculated based on the loan interest rate for the same period stipulated by the People's Bank of China.

Many auto finance companies have launched interest-free car loans, but they have different regulations on handling fees. Some require handling fees, while others do not charge handling fees.

(2) Installment payment: Although credit card installment payment is interest-free, handling fees are unavoidable. Since each bank calculates handling fees differently, after understanding the credit card handling fees, you should choose the most suitable card for your transaction.