Should you put your car loan on a mortgage?
- Car Insurance,
- Sep 27, 2019
Getting a car loan is easy, but managing it is quite a task, even for some people who do have a good financial record. However, a mortgage is something else and different from a regular car loan. Recently, many banks and other companies have started promoting an offer of combining mortgage with a car loan and this seems like a pretty good deal as you get money to get your very own car along with your house too.
Well, it’s a bit complicated than that. With more money being paid to you, there’s a greater catch at play here. You might not realize it in the starting years, but as time passes, you start to see it clearly. Combining both your mortgage and your car loan is interesting, but if you dig deeper, you’ll find out how it is not. In this article, we are here to help you decide whether or not you should put your car loan on the mortgage, along with some other important things.
Mortgage & Car Loans:
For those who do not know, the above-mentioned terms mortgage and car loans are types of finances that are acquired through a bank, credit union, lender, or some other company/person to purchase one’s own house and car respectively. Mortgages are a very common thing and when you hear a guy ranting about “his house being taken by the bank” in the movies, he is referring to it being taken into custody by the house as a result of failure to pay the mortgage. Same occurs when you fail to pay back a ‘secured’ car loan, however, it does not happen with the unsecured car loans.
Car Loans are of several types but the most important ones are secured and unsecured car loans. You can learn more about these types here.
What are the advantages of combining mortgage and car loan?
The banks that offer this said deal gives plenty of advantages which are good if you know what you are dealing with and have secure plans for a long-term thing. Putting your car loan on mortgage offers benefits which are:
1- Simplicity: Your loans become much simpler. You do not have to go to different companies or worry about different interest rates when you can simply just work these off from one company in a combined package. You will have to pay a larger sum of money which means greater interest rate, however.
2- Greater Amount: You get a greater amount of loans, which is always a plus and you can spend it however you like, in the way you like the most, but be wary that you will have to pay it back all.
What are the disadvantages of putting a car loan on the mortgage?
With the advantages, there are always some drawbacks. In this case, these are as follows:
1- Higher Interest Rate: Combining two of your loans means paying a higher interest rate. This occurs because you are being paid more amount of money than usual, so the combined interest rate also increases. Along with that, there might be some hidden charges and extra fees that you would have to pay.
2- Longer-Term: Since you are being paid some more money than usual, you would also be given a longer-term. It is usually optional but many of the banks include this in their policies, so it is a difficult thing to manage if you have to pay over and over again for such a long time.
3- Excessive Repayments: With two loans combined, you would be looking at a greater repayment. These repayments, combined with higher interest, would indeed put a toll.
4- Difficult to Manage: Since the repayments, interest rate and the term are all increased, it would be difficult to manage. The money you would be gathering just for the loan repayment would be greater and they would be hard to acquire.
All these disadvantages and no one to say sike, am I right?
So, should you put your car loan on mortgage:
At the end of the day, it is all up to you to decide what’s right for you. If you’re all in for getting your loans much simpler, you can combine the two. However, as you go along with that contrivance, know that you would be suffering from the disadvantages.
If you want lower interest rates, you could always opt for a secured loan. In our opinion, both are good options but you should take some factors like your credit score, your ability to pay back, your current employment and other financial things you deem important before you make a decision and never forget to take expert advice on these matters.
No matter what type of loan you decide to choose, you would always need to be cautious before purchasing your vehicle and if you need to perform a REVs check beforehand, you can always go to QuickREVs as they value customer satisfaction and are expert in their jobs.