Frequently asked questions about car loans

Every loan seeker has frequent questions about the car loan when looking for suitable financing for a vehicle. He clarifies some of the questions for himself in advance, other questions can only be clarified when a suitable loan offer has been found. At this point we would like to take a closer look at and answer 8 common questions about car loans.

Where can you get a car loan anywhere?

Various contact points are available when a car loan is to be taken out. On the one hand, it is the house bank that can help out with a loan. On the other hand, there are the direct banks or the so-called online banks, which in many cases help with a good loan. In addition, the car manufacturers offer financing options that can be used directly through the car dealer. In order to find the right provider for the car loan, it makes sense to compare different offers with one another.

Our advice: private donors may also be suitable for a car loan. If the borrower's Schufa is bad, a Schufa-free loan or a loan with a guarantor can provide the financing.

Are collateral needed for a car loan?

A car loan is a special loan. Securities are primarily provided by the vehicle itself. Because the vehicle becomes the main security for the loan by depositing the vehicle letter. In addition, the borrower must have a good income to be able to secure the loan. The Schufa should also be as good as possible so that the car loan can be taken out without problems and there are no payment defaults. If there are any weaknesses in the borrower, a guarantor can counteract them.

What role does flexibility play in car financing?

A car loan is an earmarked loan. The money from the car loan must therefore flow into the financing of a vehicle. It is not possible that the money will be used otherwise. The car loan can only be changed or adjusted if, for example, the borrower pays a down payment for the car and the financing amount falls. In addition, the borrower can determine which monthly installments he would like to pay and thus also determine the term of the loan. As part of the selection of the right loan offer, it can also be determined how flexible the repayment can be. For example, in the form of installment breaks, special repayments or an early redemption of the loan. However, the right loan offer must be selected for this.

Is there a credit check before the borrowing?

For each loan, the creditworthiness is checked before the loan is taken out. This is also the case with a car loan. To check the creditworthiness it is necessary to check the economic and personal requirements of the borrower. Among other things, this means that the bank carries out a query at Schufa. The borrower's income, expenses and family situation are also checked. If the credit check is positive, the desired car loan can be approved. If it turns out negative, the creditworthiness must be improved so that the car loan can be applied for.

Where are there particularly cheap car loans?

There are different points of contact for a car loan. And that's why there are different options for a cheap car loan. You can influence the constellation of interest rates on car loans particularly clearly if you have a particularly good credit rating. This is always a prerequisite for the lender to be able to provide good interest rates and options for car loans.

In addition, it is often the case that particularly cheap loans are kept ready at an online bank. Not only in the area of ​​auto loans, but also in relation to other forms of credit. If a dedicated car loan is also used and not a conventional installment loan, additional security is available for the loan and the conditions for the loan can be designed accordingly. This also relates to the interest and thus to the cost of the loan. In order to find out exactly which loan is particularly cheap where, different offers have to be compared.

Is a loan comparison always worthwhile?

With a car loan, it always makes sense to compare in advance. For this, an offer should be obtained from the dealer and at the same time an offer from the house bank. Furthermore, a lucrative offer can be found on the Internet using a comparison calculator. That there are different options when financing a vehicle, these should always be taken into account in the comparison.

How can a car be financed?

Balloon financing is just as suitable as car financing, as is financing with a down payment or financing that is similar to a classic installment loan and brings constant monthly installments as full financing. With balloon financing, a large final installment is payable at the end of the term. A down payment always makes sense if the borrower does not want to finance the full price of the vehicle, but has, for example, given a car in advance or wants to use his own financial resources to pay for the new vehicle. The most popular option is full financing, since neither private funds have to be made available nor a large final installment waiting at the end of the term.

Why is it important that the vehicle letter is deposited with the bank for a car loan?

The vehicle registration document, more specifically the registration certificate II, is required for a car loan in order to guarantee the security of the loan. In this way, the bank protects itself against default. By assigning the goods as security, the bank ensures that the vehicle is not sold during repayment. It remains in the possession of the borrower until the debt is fully repaid. If the borrower is unable to repay the loan, the bank has the option of requesting the vehicle from the borrower and thus withholding it as security. However, this is only possible if the vehicle owner has not sold the vehicle in advance.