When it comes to credit, freelancers and the self-employed are not very easy. Banks treat the self-employed as being downright poor and credit is often denied because no regular income can be proven. Some banks are open to the self-employed and if the loan application is then prepared accordingly, then a lot of excitement and trouble can be saved.
The car loan for self-employed
In the past, many self-employed people had the experience that it is not easy when a normal loan is taken. The same problem also exists when financing a car that is used for private purposes. If you want to get a loan as a self-employed person, you should not only pay attention to the cheapest offer, but it is important that the bank even allocates the installment loan to self-employed.
The suitable documents
In the form of a salary statement self-employed can prove no income. It is therefore important that documents are provided that inform about the income. On the one hand, business evaluations and, on the other hand, annual tax assessments are required.
Self-employed persons often require the authorization to provide bank information. The bank asking for a loan can then obtain information from the commercial bank or house bank.
Every self-employed person should realize that the credit decision is not made within a few minutes. The self-employed generally need a bit more patience and not infrequently a commitment takes up to 2 weeks or longer. If you want to accelerate the decision, you can submit the necessary documents with the loan application. An account-holding bank may also be pressured to process a request for information as quickly as possible.
If the income tax return is always made relatively late, then it may give the disadvantage for the self-employed. When applying for a loan, banks hardly waive the current income tax assessment.
A car loan from the Autobank
Loan seekers often try to get a car loan from a direct bank. Self-employed, of course, want to save on credit costs. However, it is not so important for the self-employed, what is the annual percentage rate, but that there is even a car loan. With a Autobank chances are a little bit higher. If self-employed inquire with a car bank, they can decide between financing and leasing.
When leasing and financing usually a deposit between 20 and 25 percent is desired. The down payment can have a positive impact on the lending decision, and the banks will receive security. If you then pay the VAT directly in cash, you can often get a car loan. Not infrequently, there are even the special conditions that private customers receive.
The credit rating of the bank
The car loan is an unsecured installment loan and the banks then check the credit rating according to certain criteria. Important factors are occupation, age, employer and the amount of income. Free disposable income is always calculated in the budgetary accounts, and the better the budget statement, the better the credit rating. Who with the help of private credit can still prove a faultless payment history, which can have good cards for a loan.
A few dates
More and more cars are rolling on the streets of Germany. Around 64 million vehicles have now been registered in Germany. There were last year 3.44 million new registrations of passenger cars. 2.2 million new cars are registered for commercial use and 1.2 million for private use. Most people who buy a new or used car finance it through a car loan.
In comparison, an average of about 12,000 euros are taken as a loan. The reason for this is that for the majority of Germans the purchase of a new or used car is not possible without an auto finance.
The inclusion of a car loan for most is not a problem, because the banks are more willing in the allocation of a car loan and the financing conditions have become more attractive.
What is a car loan?
The car loan is an independent type of product in the loans. Most auto loans are among the installment loans. These are often also referred to as consumer credit or personal loans. The car loan is a purpose-built loan and can only be used to buy a new car, a used car, a motorcycle or a camper. In addition to the installment loan, car finance is often also offered as final installment financing. This is a special form of financing. With this it is possible to finance a large loan amount through relatively small installments.
At the end of the fixed term then stands a closing rate, which corresponds to the residual value of the vehicle and must be paid in one sum. Alternatively, however, the borrower also has the opportunity to refinance the final installment.
Car loan can be taken out at the house bank, at direct banks specializing in car loans, as well as at special automobile banks belonging to the manufacturer of the selected car or offered exclusively through the car dealer.
While it is not a problem for most people to use one of these opportunities, self-employed, business people or freelancers, in particular, often have difficulty in obtaining a car loan.
Requirements for the car loan for self-employed
Car loan for the self-employed is usually bound by some conditions. An important factor is the duration of self-employment. The longer it lasts, the greater the chance of a loan. The self-employment should therefore exist for at least two to three years.
Other requirements include extensive proof of income in the form of business evaluations. These include balance sheets and income tax assessments of the past two or three years. Further business evaluations can be income and surplus accounts, profit and loss statements and annual financial statements. Another requirement for car loans for the self-employed is a business and residence in Germany.
Of course, the credit rating also plays a very important role. A positive credit rating also has a positive effect on the awarding of the car loan.
Increase your chances of getting a car loan
To get the car loan for the self-employed, you have to prove to the bank that you have sufficient collateral. Despite a professional business plan or a high level of commercial and technical skills, the bank will nevertheless want to hedge a certain amount via the usual loan collateral. These include personal security as well as insurance collateral.
In order to increase the chances of self-employed car loans, guarantees, letters of comfort, debt assumptions or guarantees may be offered as collateral.
However, it is also possible to use collateral such as real estate or movable assets, savings or life insurance as collateral.
A welcome security for car loan for the self-employed is a guarantee. In the case of a guarantee, a third party is responsible for the liabilities in the event of payment default. With the guarantee one has the choice between a private guarantor or the guarantee by a guarantee bank. As a private guarantor often family members or acquaintances come into question, which vouch with their assets and assets for the car loan.
As a rule, legally enforceable guarantees are agreed here. This means that even if the self-employed person is still solvent, the bank can still approach the guarantor quickly if there are difficulties in repaying the loan. In a few cases, a deficiency guarantee is agreed. This only comes into force if evidence of the loan default has been provided.
A guarantee bank is a promotional bank, which is privately organized and funded by the state. The role of a guarantee bank is to provide a guarantee, in particular for self-employed persons, tradespeople or freelancers, if they can not provide sufficient security for a car loan. Here you have the opportunity to apply for a car loan for self-employed at the house bank or another elected bank.
The application for the guarantee is then transferred directly from the guarantee bank to the bank, which is prepared to grant a car loan. However, the guarantee bank can also apply for a “bank guarantee without a bank”.
Here, the guarantee is promised in advance and only then you can choose the appropriate car loan. A one-off processing fee and a variable fee are due for the provision of the guarantee by the guarantee bank. This depends on the amount of the guaranteed amount.
An alternative to self-employed car loans is leasing. This is a rental contract for a vehicle for a certain period of time. This is recommended if the vehicle is only to be driven for a few months to a year. One should note that a leased vehicle is only rented and you have less flexibility and freedom with such a vehicle. In addition, new cars are generally sold for leasing purposes. Whether leasing is worthwhile for the self-employed depends on its equity.
So a lessee has to expect that he pays higher capital costs. The advantages of the leasing lie above all in the firmly calculated costs, in that often no one-time costs are due and that no expenditure for the resale arises.
Plan car loan properly
Especially for the self-employed it is very important that they plan the car loan properly, since they also need their capital to cover unforeseen expenses or to bridge bad months. For this reason, the right balance must be found between a high equity ratio and sufficient reserves.
When self-employed car loan should pay attention to the possibility of special payments. This can reduce the final rate, save interest and allow you to secure a lower rate.
Also, the possibility of installment breaks makes sense for self-employed or reducing the rate, in case of permanent difficulties. It makes sense, however, also the possibility of higher rates, if your own company has established.