Both measures are correct. The current low interest rate gives car buyers a cheap loan.
Car loan, what is needed to make everything go smoothly? Car buyers who do not want to attack their reserves have a financial cushion behind them when making unexpected purchases or repairs. There are several ways to finance a car loan.
From installment loans to retailer loans or a loan from the online bank. The loan comparison answers which financing is the right one.
The car dealer who waves with 0% financing does not necessarily have to be the cheapest provider. If an installment loan is taken out, the car buyer can receive large discounts from the dealer with his cash payment.
In many cases, these discounts top 0% financing.
Checklist – car loan what is needed
Borrowers who apply for a car loan from an online bank must prepare themselves for the following questions.
- They provide information about the person and the living situation
- Personal data such as home ownership or rented apartment and contact details
- Car data: such as make, model, mileage and first registration
- Questions about the profession and the employment relationship, temporary or permanent, how long has the employment been with you
- Questions about monthly net income, possible income from rentals, pensions, child benefit, maintenance payments or other monthly allowances
- Information about expenses such as rent, utilities, insurance, savings rates
- Questions about the financial situation, property ownership, vehicles, bank account details, house bank, overdraft limit, guarantees or other financing
- Declarations of employer, address and name
- Questions about credit bureau (return debits, etc.)
If the applicant answers all questions, the bank rewards him with a preliminary loan approval. So that the software can make a final decision, the legally binding application is still missing.
With online credit either via Post-Ident or wherever you are via Videoident.
Documentation – car loan what is needed
In addition to the pay slips for the past three months, the bank also needs a copy of the ID card. Some lenders also require a copy of the employment contract or pension notice. The employment relationship may not be limited and may not include a trial period. The borrower must be of legal age and should not be older than 70 years.
The unencumbered credit bureau is important, but if the credit bureau shows negative entries, regular lenders immediately reject the financing. The income should be above the garnishment exemption limit. For a single person that would be net 1050 USD.
The lender will check this information and approve the car loan if necessary. If the bank’s income is insufficient, it could also request the vehicle letter as security. Based on the documents, the lender will check whether the borrower is able to pay loan installments. He will also check how payment behavior was in the past.
Car loan what is needed – additional services
If you take out a car loan, you should make sure that you get flexible framework conditions. These include free special repayments and installment breaks.
However, it should also be possible to change credit rates during the term. Special repayments are appropriate if the borrower can expect premiums or other special payments throughout the year.
These could be paid on the loan. This would pay off the loan debt faster. The financial situation can bring a smaller financial bottleneck. To bridge possible bottlenecks, the special condition “installment break” serves.
A change in the credit rate up or down should be possible if it is appropriate to adjust the financial situation. It is of course important that the desired conditions are not only agreed verbally, but are in the loan agreement.
Car loan – rejection possible?
If the question – car loan what is needed – is not completely solved to the satisfaction of the bank, the loan request is rejected. After all, every lender requires sufficient creditworthiness for a loan to be granted. This consists of a sufficient income, a permanent position and a clean credit bureau.If the income is insufficient or the customer has a negative entry in the credit bureau, lenders often ask for additional security.
On the one hand, this can be the deposit of the vehicle letter. It is also possible to involve a second borrower or a solvent guarantor. These people must be solvent, have a sufficient income and have a clean credit bureau.
Automotive letter as security
Many lenders answer the question of what car loan is needed by requesting credit protection via the title letter. The “transfer by way of security” protects the capital. However, customers should know that the car belongs to the bank during the loan term. Only after the loan has been settled does the car actually really belong to its holder.
Problem: If there is a financial bottleneck during the term, the car cannot simply be sold. Because if the borrower does not pay the installments as promised, the bank pulls the vehicle in. It is then for sale. The sales proceeds cover the remaining debt and additional enforcement costs.
Poor credit rating and bad credit bureau
Personal creditworthiness also plays a decisive role in the question of what is needed for a car loan. If the score is weak, the requirements for additional credit protection increase.
If the income justifies the credit, but the credit bureau shows negative entries, additional problems are lurking. Basically, only providers of special loans are eligible.
Special loan – what should you watch out for?
In order to then find a lender, borrowers have to pay attention to some things. Anyone who knows about his bad credit bureau can possibly get a car loan with a surety. Inquiries should be made from a bank, perhaps from the house bank. If there is no lender, credit intermediaries offer their support.
If the credit bureau is so bad that even a credit agency cannot find a German lender, the foreign loan remains an option.
Foreign loan conditions
However, the granting of foreign credit is also subject to conditions. The income must have an attachable portion of at least 100 USD. So a single person has to earn about 1150 USD net. What is important with this type of loan is the employment that has existed for at least one year. It may not be limited and may not include a trial period.
The borrower is of legal age and not older than 62 years. The place of residence is in Germany. The interest rate level is often around 11-12% higher.