Do you want to take a loan to buy a car? Here are some interesting facts that you need to know about car loans offered by banks in Lebanon:
2- Period to pay: The longest car loan period in Lebanon is 7 years offered by only one or two banks! The standard period is 5 to 6 years. If you are buying a NEW car the bank gives you a longer period to pay the loan than if you are buying a USED car!
3- Down Payment: Down payment can be as low as 0%! The down payment on used cars isalmost always higher than the down payment on new cars.
4- Interest Rate: Watch out! The interest rate charged by banks on car loans is always calculated on the initial amount of the loan, NOT the remaining balance of the loan! So if you take a 20,000$ loan for 5 years at an interest rate of 5% you will have to pay 5% of 20,000$ EACH year. So even if you reimburse 5,000$ the first year and the remaining balance is 15,000$ you still pay a 5% interest on 20,000$ (not 15,000$). Also note that interest rates on USED cars are usually higher than interest rates on NEW cars.
5- Insurance: Be very careful for the cost of the insurance! Cost of insurance and interest are the main costs you pay for taking a car loan. A lot of banks have their own insurance companies or sign deals with big insurance companies to take a cut on each client they send them. ALWAYS consider both the interest rate + the insurance cost before choosing a car loan. So if a Bank offers you a car loan with a very low interest rate do not be fooled: it might be charging you a very high cost of insurance and you might end up paying much more than taking a loan from another bank which offers you a higher interest rate with a lower cost of insurance! We will be telling you more about car loans, meanwhile if you have any questions do not hesitate to ask our experts by posting in the comments section!