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T of the loan to be cleared at the end of the period. The term of the loan is typically between one and four years. If you take out a one-year loan, you can defer payment of up to 60 per cent of the total loan until the end. The percentage you can defer goes down as the loan period lengthens; you can typically defer 30 per cent of the loan with a four year deal, for example. At the end of the loan period you have a number of options Pay the balance owing and keep the car Sell the car and pay the balance with the proceeds Take out another loan to pay the balance These loans are great if you want to keep your monthly outgoings down, but there's always a chance that the car will depreciate faster than you expect - and be worth less than the amount you still owe at the end of the term. If that happens, and you're aiming to use the residual value of the car to pay off the loan, you may be left with a shortfall to make up. Credit card A credit card can be a good way to pay for a car if you have access to a card with a low rate of interest. Many card issuers now offer introductory rates of interest, sometimes as low as 0 per cent for new cardholders. Shop around for a credit card offering 0 per cent interest over six, nine or even 12 months. Be aware, though, that, at the end of the introductory interest rate period, the rate will go back up to the card's standard rate and any balance you still owe on the cost of your car will have to be paid off at this rate. This may well be higher than personal loan rates. If you can, aim to pay off the outstanding balance on the card before th

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