Nowadays, a car is no longer a luxury item because many workers would not be able to get to work without this means of transportation. Unfortunately, the traffic connections are very bad, especially in rural areas or near the outskirts. But if you already pay off a loan, you automatically have a reduced credit rating, which could lead to difficulties with a car loan despite a loan. But that doesn’t mean that you have to forego a car loan despite a loan.
Bank will approve a car loan for existing liabilities
Consumers who already have to pay one or more loans are somewhat unsure whether the bank will approve a car loan for existing liabilities. This cannot be answered with a clear yes or no, since it depends on the personal economic situation of the borrower. In general, however, it is quite possible to get a car loan despite a loan.
In addition to the unencumbered Credit Bureau and the correspondingly high income, the budget statement of the banks must also give a positive decision. If this is the case, the bank gives the green light, but if it is red, it means that the available income is insufficient and refuses a loan.
Despite a loan, a car loan is usually not a world-shattering thing. If the credit rating is right, the bank will not say no. The customer has several options to pay for the car. Debt restructuring is a good idea, especially when several loans have to be paid. This means the bundling of several liabilities, which then leads to a single rate. However, savings should come from a debt restructuring.
If he is considering debt restructuring, he should take a look at his old loan agreements and pay particular attention to the notice periods for the loans. If no free special repayments have been agreed, the bank can calculate a prepayment penalty. Why do some consumers wonder?
Banks earn on the interest that is calculated on a loan. If the loan is now paid off or rescheduled before its loan term, the bank records a financial loss, which it mitigates with a prepayment penalty.
Can a loan installment be paid?
Anyone who chooses a car loan despite a loan should check their finances. It is recommended to draw up a budget. In this case, the income is compared to the expenditure, in the best case scenario there is financial scope. That would be the confirmation that he can afford another loan installment. The bank is also drawing up a budget and will only approve a car loan in spite of a loan if it is green.
If the budget is green, it shows the bank that there are enough reserves left to pay a loan. Nevertheless, the scenario should always be run through with another loan, what if … If there is unexpected unemployment, the rate of unemployment benefit can still be paid.
If a serious illness comes with subsequent disability, a rate can be paid from the poorer disability pension. The employer can also become insolvent, an increased spectacle today, so the installments should always remain affordable. A borrower should think about this and also adjust the installment amount to these possible scenarios.
But not everything can be covered in life, so residual debt insurance should be considered. This can make sense if the borrower is the only earner in the family. In the event of unemployment or disability, the residual debt insurance could step in. However, it should be noted that these insurance policies have some pitfalls in their terms.
For example, some companies only pay if they are unemployed through no fault of their own and only if contributions have been paid for six months. So you should inform yourself beforehand. There are also concerns about the amount of residual debt insurance. Here the customer could look for insurance himself and not take the one that the bank suggests. There are also savings.
With a mortgage loan, life insurance is always taken out. It would have to be questioned whether it could be used to insure the car loan despite the loan.
If the customer decides to take the car loan through a bank, he can count on favorable conditions if he decides on a dedicated car loan. However, the vehicle letter must then be deposited with the bank. The car then belongs to the bank until the loan has been paid in full.
Another tip: If there is a balance left in the household bill, financial experts advise that this amount should not be used entirely for a loan installment. One speaks of a 1/3 of the amount, the rest should be put aside. This leaves a financial buffer when unexpected purchases have to be made or other things that often cannot be put off. So you would not have to look for a loan again immediately.
The loan from the bank
If a new car is bought, you should stretch out for your blanket, ie it does not necessarily have to be a luxury car, a solid small car or an upmarket middle-class car can be better financed and maintained. It’s not just the credit installments, the car also has to be insured and needs petrol to drive at all.
The installments should always remain affordable, so there is no credit default with its unpleasant consequences. If the installments can no longer be paid, the bank can move the car in and have it auctioned or sold. The loan would then be paid off. If the customer notices that they can no longer pay the installments, they should not wait long, but instead seek a conversation with the bank.
A solution can then be found together, in many cases one or two installment breaks are enough for the customer to pay again.
With a loan from the bank, the customer can act as a cash payer if he opts for a car dealer and obtain corresponding discounts and discounts.
Car banks have roughly the same conditions as conventional banks. In addition to the classic installment loan, the auto bank also offers balloon financing or three-way financing. With the latter two types of financing, the repayment is low, but a high final rate must be paid for this.