This is the easiest way to borrow for the car purchase

Most people who buy a car need to borrow money to finance the purchase. Here, we explain, among other things, the concept of residual value and list which options you have before buying a car.

There is a lot to think about when you are faced with a car purchase and all the choices can be experienced as a jungle. Of course, we all want as low an interest rate as possible, but don't forget to also look at the monthly cost and whether there are any additional costs to the loan. And you, don't miss that you can deduct 30 percent of all interest expenses up to SEK 100,000.

These three loans are available:

• Car loan

• Private loan

• Extend the mortgage

Car loan

Car loans generally offer good terms. To get a car loan from the car dealer or the bank, a cash deposit of 20 percent of the price of the car is required. In connection with the purchase, your car is registered as collateral for the loan.

Car loan through Kvdbil - zero admin for you

Kvdbil sells approximately 26,000 cars a year and therefore has the opportunity to negotiate an advantageous car loan with low interest and good terms for you. With us, you can choose to take out a car loan with or without residual value, you choose what suits you best!

Car loan with residual value

When you take out a car loan, you do not amortize the entire value of the car, but instead have corresponding amounts of the debt that the car is estimated to be worth when the repayment period is over. When the loan period is over, the car's residual value (ie how much the car is estimated to be worth) is offset against the remaining debt and can then choose to start over on a new car. Since you are not amortizing the entire value of the car, your monthly cost will be lower. Taking out a car loan with residual value suits you who like to change cars often.

If the residual value is lower than the remaining debt, you can choose to extend the loan until the car is fully paid.

Car loan with residual value

If you choose a car loan without residual value, you amortize the entire value of the car. This leads to a higher monthly cost, compared to a loan with a residual value. But if you plan to own the car for several years to come, this may be an option for you.

Can the loan go with the car?

If you are going to buy the car privately, i.e. not through an intermediary or car dealer, it can be good to know that if there is already a loan on the car, it follows the car at the time of sale. You thus take over the previous owner's unpaid debts. If you buy the car from Kvdbil, we have already settled the loan with the bank, in other words, you don't have to worry about unpleasant surprises afterwards!

Private loan

When you take out a private loan, or a so-called blank loan, you do not need to have any cash investment for the car purchase. The loan is taken without collateral and is neither tied to the car nor the home. The security only consists of you having a job and an income that the lender considers sufficient to pay the loan. However, the interest rate is usually significantly higher, compared to other loans.

Extend the mortgage

If you have the opportunity to borrow money on the home, that is another option. Currently, you can borrow a maximum of 85 percent of the home's value. However, the amortization requirement that came into effect on March 1, 2018 means that this can be an expensive option.

The rules state that mortgages between 50-70 percent of the home's value must be amortized at 1 percent per year. Mortgages over 70 percent of the value must be amortized at 2 percent. In addition, you who borrow more than 4.5 times your annual gross income (salary before tax) must repay an additional 1 percent of the total loan amount. It is possible for the lender to make exceptions to the amortization requirement for additional loans, but this can only be done if the total loan picture does not exceed 4.5 times the household's total gross income.