Here's what you need to know before applying for auto loan

Instead of using the regular installment payment methods when a borrower decides to take out an auto loan, banks and other financial companies typically offer financial-support packages that assist a borrower in having a selection of repayment possibilities to suit their individual financial capacities. How to be financially unstressful while still having own luxury cars? Let's explore the most popular financial-support packages currently available.

A principal grace period: Ways to lower repayment during the initial stage

A principal grace period refers to the delay payment for a short period of time from the disbursement of your loan to the date of the first payment of principal. During the grace period, the borrower only needs to pay the monthly interest on the loan, while the principal amount borrowed will not be included in this period.

The grace period in auto loans can last from a few months to several years, depending on the agreement between the parties. Therefore, deferring the payment of principal helps reduce the financial burden for borrowers in the initial period when they start repaying the loan.

Balloon payment: A cost-saving financial solution

A balloon payment, also known as a deferred payment, is a large payment that is "deferred" until the final payment of a loan to complete the debt, usually the entire remaining balance of the loan. When customers use balloon payments, they only need to pay a lower monthly amount during the loan period, which helps reduce the monthly interest costs of the loan.

Compared with normal payments, balloon payments will make it easier for customers to own an expensive luxury car because this solution reduces the cost of monthly installment payments from the first EMI until the time specified by the balloon payment program. As a result, customers have time to arrange cash flow, be more proactive in financial management, and conveniently invest their savings.

Understanding the needs of customers, Shinhan Finance cooperates exclusively to Haxaco Vo Van Kiet to establish financial-support packages to purchase Mercedes-Benz with many attractive offers: "First-3months principal grace period" and "30% balloon payment at the end of the loan".

In addition, Shinhan Finance's loan packages ensure a quick and efficient document appraisal process, helping customers to save waiting time.

Please see the details of the exclusive financial support package from Shinhan Finance here.