Credit institutions only grant a car loan in spite of the probationary period if credit protection allows it. The best prospects are if you apply together with a second solvent borrower. …
Credit institutions only grant a car loan in spite of the probationary period if credit protection allows it. The best prospects are if you apply together with a second solvent borrower.
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Car loan despite trial period – outlook
A car in our time has long ceased to be a luxury item. The car is part of the standard equipment of everyday life. There are many workers who cannot get to work without a car. Those who live in the country often do not even have the option of using public transport.
Car loan feasible despite trial period, but inevitable?
Self-employed people who need a car to make a living depend on a car. The first way to get a loan is usually the way to the house bank. But these banks have stricter rules than, for example, the banks on the Internet or the car bank. In addition to sufficient income, the provisions include a permanent employment contract.
Of course, those who are in the trial period cannot show this. The loan seeker also does not know what his future employment will look like. Does the employer quit during the trial period or does it continue? With this uncertain forecast, the house bank often does not provide a car loan.
Car loan despite trial period – so it works with the car loan
Anyone who has just changed jobs is in the trial period. The contact person for the difficult loan request is, for example, the local car dealer. Especially when the car buyer is a good customer with the dealer. He knows the customer well from previous financing, so the car loan could still work despite the trial period.
The dealer passes the documents on to the car bank, which credit bureau asks. If the credit bureau is clean, the loan approval is within reach.
Through the dealer there is the possibility to finance the car with an installment loan or with a special car loan. If he chooses the special car loan, the vehicle registration document is deposited with the car bank. This can result in even more favorable conditions, since the bank has the car as security. The likelihood of a commitment increases.
Likewise, a guarantor or co-applicant would favor the car loan through the dealer’s bank.
Car loan despite trial period – financing from the dealer
If the income is not very high or other loans have to be paid, there is a kind of dealer financing. It is called three-way funding.
As a rule, car dealers only offer this loan for new or almost new vehicles. “Going” as high as this therefore needs to be carefully considered. With three-way financing, the customer benefits from very low rates. He often does not make any repayments, but only compensates for the loss in value and the interest.
At the end of the term, however, the large final installment is payable. Now the customer has three options, he can keep the car and pay the final installment from reserves. Or he keeps the car and continues to finance the final installment. Attention, the follow-up financing usually does not apply to the interest conditions and installments as when you closed the deal.
As a third option, he can return the car. Then, however, the car may only show the usual signs of wear. The car should then return the residual value so that the final installment is paid off. In general, three-way financing is only recommended if the final installment is available when it is due
Car loan despite trial period – bank loan
As mentioned before, banks are very reluctant to take out a car loan despite the probationary period. The reason is the insecure employment relationship.
Neither the bank nor the borrower know what will happen after the trial period. To this end, borrowers can offer the bank collateral. The additional security makes it easier for the bank to determine the legally required secure lending. The best security that a bank can offer is a solvent guarantor or co-applicant. If the guarantor has excellent solvency, the borrower can even count on a higher loan amount. The guarantor is jointly and severally liable for the loan with his assets.
There is no better protection for the bank. But first find a guarantor that meets the requirements of the bank.
Most of the time, the close relatives ask whether there is a guarantor. It is important for a guarantee that the borrower and the guarantor have an absolute relationship of trust.
Car loan despite trial period – important to the guarantee
A guarantee is always a risk. No matter whether it is a close relationship or not.
After all, a “stranger” is practically liable for someone else’s debts. The relationship may be so close. Therefore, inform the guarantor or co-applicant about the risks of the “signature”. Even the guarantee is reported to the credit bureau.
It is entered in the guarantor of the guarantor and can reduce its creditworthiness. Because if the borrower can no longer pay the installments, the guarantor must do so.
If someone provides a guarantee, he or she should gain insight into the borrower’s finances, regardless of trust. For self-protection, it can also make sense to pay the loan installment to the guarantor’s account. He will then forward the installment payment. Alternatively, it would also be conceivable for the guarantor to check whether the rate is flowing every two months.
The motto “trust is good – control is better” should have priority here.
Car loan despite trial period – loan security
In addition to the guarantor, a second borrower can also provide the necessary security. Similar to the guarantor, the bank also takes this responsibility if the borrower does not pay the installments.
It too must be solvent. Other loan collateral, such as home ownership or other valuable investments, can also secure the loan.
Nevertheless, should the question arise, is car loan really inevitable during the trial period. Doesn’t it have time until the trial period is over and a permanent employment relationship exists?