A negative entry can appear very quickly in the Credit Bureau. Since the payment of the invoice overlapped with a reminder, the mobile phone bill was completely forgotten, as well as the installment payment at the mail order company. But not only the negative entries in the Credit Bureau signal a bad credit rating. Income could also be a hurdle that the loan seeker has to overcome if it is too low and does not meet the conditions of the bank. Many will now say, why does a car loan have to be taken out despite bad credit?
Meet the conditions
The car has long ceased to be a luxury item, and many employees have no way of getting to work if there is no car. The transport links, especially in the rural sector, are to be viewed differently than well. The same applies to the train connections. A car is then the subject of the loan request.
However, banks require the customer to be able to meet their conditions before accepting a loan. That is a sufficiently high income, the impeccable Credit Bureau, which is free of negative entries and the permanent employment. If the customer then only has to pay a few liabilities, he is the ideal bank customer. But many customers cannot meet at least some of the conditions and the car loan remains for them despite their poor credit rating. The credit opportunities are better with a car loan despite poor creditworthiness than a normal installment loan with bad creditworthiness.
The question arises for the customer if he buys a new car or a used one. However, a used car can also be expensive and cost a few thousand euros, which then requires a car loan despite poor creditworthiness. The customer has two options for financing the car. He can ask the dealer or a bank.
Traders work with partner banks that can offer a good loan offer. If the customer wants to finance his car through the dealer, the bad awakening will come. Because partner banks also require sufficient income and / or good credit, dealer banks are also bound by their regulations and reject the car loan despite their poor credit rating.
However, the customer does not need to despair if his loan request to the retailer bank has been rejected. If you are a good customer at a branch bank, you should first contact your house bank. A negative entry is not always the reason for a loan refusal. If it is only an easier negative entry, this entry could be explained in a personal conversation with the bank employee.
The terms and the credit protection
If the customer otherwise has regular income and there are no other payment problems, a car loan could be approved by the house bank despite the poor credit rating. The customer’s period of employment with his employer is also important. If he has been working in the same company for many years, this is rated as positive. If it is still a civil servant or a public employee, the customer need not worry, then the loan approval will be easier.
There is no threat of job loss with subsequent unemployment, so that the car loan could be approved despite poor creditworthiness. If several credit inquiries have already been made, all of which have been rejected, you should not look further. Here you should make a self-assessment with the Credit Bureau, in order to have older entries deleted. The creditworthiness will then be positive again.
If the entries are rightly noted in the Credit Bureau, the credit chances could be increased with a second borrower or a guarantor. These people could come from the customer’s immediate vicinity. But conditions are also imposed on these people. You absolutely have to be solvent, ie have a sufficient income, a positive Credit Bureau and a permanent position.
Likewise, the liabilities to be paid should be limited. These people must be able, if the borrower defaults, that the installments can be paid without any problems. This constellation is evident in a second borrower as well as in a guarantor. Both are liable for the loan if the borrower can no longer pay.
Of course, a car loan can also be approved despite poor creditworthiness if the customer can provide other property security. Think of a property, a life insurance that can be lendable or other valuable things. These things remain the property of the bank until the loan is paid off.
Basically, a car loan can be approved despite the bad creditworthiness, negative entries or insufficient income if the loan is secured. In addition, the loan can be granted for a specific purpose, ie the car or the vehicle letter will then be deposited with the bank as security. The customer cannot sell the car during the term of the loan.
If you can meet some of these credit rating increases, you should look for a cheap loan. To do this, he should use a credit comparison that he can find free of charge on the Internet. The loan amount, the term and the desired rate must then be entered. Then the customer is shown a current list of the best lenders.
The customer then not only sees the interest rate level of the loan, but can also read the terms and conditions of the provider. If a provider is found, the loan application can be made directly via the comparison. With the information to be provided in the form provided, the collateral to be presented can then be named, which will increase the credit chances.
However, the customer should be prepared that he will not receive a quick express credit or lightning credit because this type of credit requires a perfect credit rating. If there is a bad Credit Bureau or the income is insufficient, the loan is rejected. Banks use an automated check procedure for a fast loan, the customer with a poor credit rating will then fall out of the grid of the banks.
The car loan is then checked in individual cases despite poor creditworthiness and, as a result, takes a little longer.
The Credit Bureau free credit
However, if banks reject the loan application, the customer can look around for the Credit Bureau-free loans. Here, a credit broker is a good starting point, because he knows banks that also grant a loan with poor creditworthiness. He also has contacts with foreign banks where Credit Bureau is not the decisive factor. For this, however, the income must be right and there must be a permanent job.