How to finance the purchase of your car with a car loan?

parked white Ford Explorer SUV

Do you want to buy a new vehicle, new or used, and you do not have the necessary savings to pay cash? You can take out a car loan. How does a car loan work? How are the car loan rate and duration calculated? How to do a car loan simulation?


A credit commits you and must be repaid.

Personal loan, consumer credit, auto credit: what are the differences?

Consumer credit includes several types of loans:

  • affected consumer loans (offered at the place of sale of the good or service by a credit organization linked to the seller),
  • and unallocated consumer loans . Personal loans and rental with option to purchase (LOA) are among them.

Auto credit simulation

Use the LCL Auto loan simulator to simulate your car loan by specifying the amount of the loan envisaged, the age of the vehicle (new or less than 2 years old / used over 2 years old), the monthly payments and the duration that would suit you best .

Car loan: amount, duration and rate

The amount of the car loan and the amount of the monthly payments are agreed between the lender and the borrower according to his repayment capacity, his needs and his personal situation.

The car loan rate (fixed rate) and its duration depend on the age of the vehicle (depending on the lender, the duration may be longer for the purchase of a new vehicle). The term of the loan is generally between 1 and 7 years. The longer the credit term, the higher the cost of credit.

Car loan: early repayment and postponement of maturities

Some car loan contracts allow the loan to be repaid free of charge at any time , in whole or in part, depending on the conditions of the contract.

Some contracts also make it possible to postpone a few installments per year (in particular the first installment). Ask your adviser.

What is a personal loan?

The personal loan is a “classic” short-term credit intended to finance a personal project for a minimum and maximum amount of number limited by the issuer. The amount borrowed is paid in one go into the borrower’s bank account. The borrower repays his personal loan on the basis of monthly payments and fixed rates for the entire duration of the loan.

Car loan and borrower insurance

When you take out a car loan, borrower insurance is optional . However, it is often recommended by the lender, in particular with regard to the risks associated with death and disability. Thus, in the event of death or disability, your loved ones will not have to assume the repayment of the loan: it is the insurer who supports the capital and the interest remaining due.

Auto credit and withdrawal period for the purchase

If you finance the purchase of your car with a car loan, the sale is subject to the loan and you have a cooling-off period of 14 full calendar days from the day the loan contract offer is signed.

The lender can release the funds from the 8th day following acceptance of the offer. If you withdraw after the funds have been issued,you must repay the capital paid and the interest due for the period up to the date of repayment of the loan, at the latest within 30 days following notification of your withdrawal.

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