Karrenn has created a poll asking its community about the preferred loan type for purchasing a car. Based on a total of 451 votes, the results showed that the personal loan turned out to be the preferred option winning 60% of the votes, while car loan votes were at 40%.
Now to analyze the difference between car loans and personal loans, car loans have lower interest rates because they are secured loans with the car itself serving as collateral. However, car loans usually require a down payment, and the buyer is confined to a specific insurance company which the bank lender has established an agreement with. Personal loans are more flexible than car loans, however, they have higher interest rates because they are unsecured loans and are granted by a bank based on a person's salary and general financial status.
Interest rates have increased considerably on both types of loans in Lebanon lately, so it would be wise to study your borrowing options carefully before making a decision. One way to decrease interest fees in case of a car loan is by increasing the down payment as much as possible.