If you don’t have the money for the car, there are financing options. – Photo: © shaniaculter, Pixabay
By Wolfgang Schneider
The car is the German’s favorite child. For most people it is even indispensable in everyday life for driving to work or doing shopping. Therefore, it quickly becomes problematic if a new car has to be purchased and the financial reserves are not sufficient to cover the purchase.
In this case, the financial resources must be obtained elsewhere. There are several options for this – many of those affected opt for a leasing contract, for example. However, this can be associated with various hidden costs. A conventional installment loan comes with high interest rates, which is why a car loan is usually the best option. The car serves as additional security for the banks, so that the interest rate is comparatively low. If you apply for it online, a car loan impresses with its particularly quick approval.
What is meant by a car loan?
A car loan is a specific, particularly low-interest loan. The loan amount can be used to purchase a used or new car, motorcycle or RV. On top of that, it can also be used to finance expensive repairs to the mobile vehicle.
Who one Apply for a car loan Ideally, you can expect up to 100,000 euros. The interest rates are so consumer-friendly because the vehicle represents additional security, which financial service providers reward with particularly favorable conditions.
The quickest and most convenient way for car buyers to get a car loan is to apply for the loan online. In this way, interest rates can be reduced even further because online providers do not have to maintain a costly branch network and usually pass these cost savings on to customers.
Different car loan models
The lending institutions offer a car loan in various models, so that the loan can be tailored to the needs of the borrower.
Installment financing
The car installment loan is popular. Exactly the amount required to purchase a new vehicle is included. The repayment is handled in the same way as a conventional installment loan: the loan amount, including the lower interest rates, is repaid in consistent monthly installments.
Terms of up to 72 months are possible. It should be noted that the cost of the loan increases with the length of the term. If you want to be debt-free as quickly as possible, you should sign a contract with shorter terms and also agree on special repayments.
Balloon financing
This type of car financing is characterized by very low rates during the contract term. However, the banks have nothing to give away – the lion’s share of the loan repayment is therefore calculated using the final installment, which can then amount to several thousand euros.
Three-way financing
This car financing model is also very popular and common. This is actually a subtype of balloon financing. The car buyer can choose between three different options at the end of the loan term:
Either he pays the high final installment out of his own pocket – or he applies for follow-up financing. The third option involves returning the vehicle to the dealer. When you buy the car, a future purchase price is agreed upon. With this option, the should not be confused with a lease returncare should be taken to ensure that the agreed mileage is not exceeded and that the car is returned in good condition.
What requirements must be met?
In terms of the conditions that credit institutions set for granting a car loan, the car loan is similar to a conventional installment loan. As a rule, the following requirements must be met:
- coming of age
- Regular, sufficient income
- Unrestricted business capacity
- Permanent employment
- Residence in Germany
- Bank account at a German financial institution
- Positive Schufa score as proof of creditworthiness
Which documents must be submitted?
In order to check the borrower’s solvency and eligibility to apply, the financial service provider needs some documents and documents that are uploaded to the provider’s website.
First of all, this involves a copy of a valid photo ID so that the borrower’s identity can be clearly established via a video ID. In addition, proof of wages and salaries and a current bank statement are required. As a rule, the bank reserves the right to keep the vehicle registration document (registration certificate II) in safekeeping as long as the loan has not yet been completely repaid.
2023-10-05 00:06:18
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