Loan application with poor credit rating
Many people are looking for a car loan despite poor credit rating, because they are in dire need of a car. There are several possibilities here. However, it must be distinguished whether the bad credit rating comes from a lack of or too little income or by negative credit bureau entries. If both are present at the same time, it will be very difficult, but not impossible, if certain principles are followed and additional collateral is available.
For a car loan from a German bank comparable conditions must be met, as they apply to an installment loan. An essential difference is the intended use. While there are no restrictions on a installment loan, a car loan is completely different. It may only be used to finance a new or used car. You must be able to provide the bank with a corresponding proof of use on request. In addition to a bank loan is also a dealer credit to choose from.
If the credit rating is bad, you have to expect that you will receive a credit rejection. Nevertheless, you should not give up prematurely, but consider other alternatives. You could, for example, take out a loan without credit bureau or a personal loan. If you need help and support in finding a car loan despite bad credit, you are welcome to contact a private credit intermediary.
Due to the numerous offers, it is not always easy to make a decision on where a car loan should be taken despite poor credit rating. Here it would be advisable in any case to play through different variants and perform a detailed comparison on the Internet. There are credit portals that can be used by all potential creditors free of charge and around the clock. An accurate and up to date result can also be provided by a loan calculator, which can be found on most credit comparison portals. Here you can enter the desired loan amount, the term and the monthly installment and press a button to calculate your offer. You will then receive several offers that match the search criteria you entered in the loan calculator.
Bank loans can be divided into German and foreign bank loans. In addition, they must be differentiated according to their purpose. Car loans are generally earmarked. With them, a foreign use for the financing of other consumer goods is already excluded from the outset.
For a car loan from the house bank or from a comparable bank or savings bank, you have to meet certain requirements. Especially great value is placed on your income and on your credit bureau information, which should not comply with negative entries. If this is the case, the credit rating can deteriorate considerably. Often the consequence is that you can get no or only one loan under difficult conditions. In addition, a lack of or insufficient income is a common problem. In all these cases, you can improve your credit rating by providing your bank with various collateral, naming a second applicant or guarantor. A second applicant will be responsible for the payment of credit installments as much as you are, while a guarantor will only be responsible if you yourself are unable to meet your credit commitments.
If your credit rating is limited and you have the option of receiving a small loan, you may be able to use it if you pay a larger sum in the dealership. This significantly reduces your financing needs. A car loan despite bad creditworthiness is so much more possible, as if you finance the entire purchase sum over a loan.
Foreign bank loans are also known as bank loans, but have not come from Switzerland since 2010 but from Liechtenstein. Here you can get a installment loan or a car loan. The maximum loan amount here is 7500 Euro. Alternatively, a car loan of € 3,500 or a car loan of € 5,000 is available. However, this is a car loan without credit bureau and not always a car loan despite bad credit rating. If the bad credit results from your lack of income and if you do not have a fixed employment contract, it will be very difficult to get a loan from abroad. Again, however, you can usually make up for missing personal requirements with a second applicant or a guarantee.
Dealer credits often play a major role in financing a car. They can be picked up directly at the dealership where the new car is to be purchased. They are not only offered for new cars, but also for used cars. There are several factors that speak for a dealer loan instead of a bank loan. Interest rates are often very cheap with a dealer loan. In addition, the purchase and financing of the car is done in the same place, which saves unnecessary ways and time.
If you have the option of paying for an old used car and / or paying a larger deposit for the car you want, you should definitely make use of this option. This has the advantage that the financing requirement is reduced. In the dealership, people can often get a car loan despite bad creditworthiness, for example, have the minor negative entries in the credit bureau or exercise a self-employed or freelance work with fluctuating income. However, there can be no guarantee of that. The dealer is happy to provide information as to when a car loan despite bad creditworthiness is possible and when not.
In many cases, relatives or acquaintances are prepared to contribute some of the cost of the new car and to give out a car loan despite their poor credit rating. Another alternative would be a personal loan from a stranger. Such a loan is most likely to be found on the Internet via a credit brokerage portal. Here is a free registration and an entry of the loan request possible. There is the advantage that the entire amount of funding does not necessarily have to come from just one person, but can also come from several people.