Germany is still a car country. But not everyone can easily afford their own car. But even for people with a weak credit rating, the prospects of getting a car loan are not that bad.
Even the purchase of a small car like the Smart can be financed through a loan.
The car is of enormous importance in a territorial country like Germany. This is true in private life and even more so in professional existence. And so almost every adult in this country is dependent on a car. The credit behavior of most Germans is exemplary. Those with a poor credit rating are justified in asking themselves whether they can get a car loan at all or whether they have to resort to other methods. Fortunately, there is good news in this respect.
Who has to fight with a bad credit rating?
Unfortunately, it is often a mystery how banks assess the creditworthiness of potential customers. Sometimes it’s not even the borrower’s own financial situation or payment history that puts the kibosh on a loan application, but simply the fact that the bank follows a scoring model. This means nothing more than that it includes the living environment in the credit rating calculation. So if you are unlucky with your neighbors, you are often left out in the cold. However, the group of people who have problems with applying for a loan does not only include people with negative Schufa entries. Many banks also rate the creditworthiness of freelancers, the self-employed, temporary workers and even entire groups of employees as poor per se.
Car loans are easier to obtain than other consumer loans
Since a car loan is no ordinary consumer loan, the chances of a loan approval are relatively good despite poor credit rating. Why? Quite simple. Unlike a simple consumer loan, which can be used to buy furniture, consumer electronics or a vacation in the south, a car loan is earmarked for a specific purpose. In this way, the financed vehicle serves as collateral for the bank.
If the borrower is unable to service his or her installments, the bank repossesses the vehicle and can sell it to pay off at least a large part of the outstanding debt, if not all of it. Since the risk for the banks is significantly reduced by the tangible asset deposited, even citizens with a poor credit rating are more likely to obtain a car loan than a normal consumer loan. . An overview of car loans despite Schufa shows the different conditions in this regard. However, banks often require appropriate partial or full insurance to maintain the value of the vehicle.
How do I get my car loan despite bad credit rating?
Usually the financing works either over the house bank or a direct bank. The likelihood of success is greater, however, when financing through a car dealership or a bank. Car bank. This is especially true if the borrower opts for a low-sales model or. a discontinued model decides, which must still be sold. Credit financing ultimately serves to maximize sales.
Easier conditions often also apply to used cars that have been sitting in the dealership’s yard for some time, or in the case of a high down payment in the range of around 30 percent. For those for whom even this does not work because of a too bad Schufa score, they can still try to get a personal loan from friends, acquaintances or relatives.