Car loan with poor credit rating
Which bank grants such loans?
Anyone who is not creditworthy because no attachable income can be proven, the credit bureau information is negative or earns too little money as a low-income earner has a hard time getting a loan at all. Hartz IV recipients are also affected, whose unemployment benefit II is so small that it is just enough to survive, but not to contest an auto rate and vehicle maintenance.
Banks do not lend to people who do not have attachable income. Since child benefit, maintenance, housing allowance or child-raising allowance, but also sickness benefit and unemployment benefit are not counted as attachable income, it is difficult for some consumers to get a loan despite actually having sufficient income because the income is not attachable. A guarantor does not take any great risks because he can assume that the borrower’s remuneration is certainly sufficient to service the installments from the loan.
What a guarantor should know
Whoever is asked to guarantee a car loan should be clear about what he is getting into. Experience shows that many guarantors are not aware of this.
With the joint and several guarantee, the guarantor undertakes to pay the installments instead of the borrower if he is in arrears. If an installment breaks out in the loan agreement, not only the borrower receives a reminder, but also the guarantor so that he knows that danger is in default. The guarantor can now influence the borrower and ask him to pay the installments. If he does not do this, the guarantor is obliged to the bank.
But not only that. Even if the borrower fulfills his current obligations, the guarantor is charged with the guarantee because a report is sent to credit bureau. In the worst case, it can happen that if the guarantor later wants to apply for a loan himself, he then does not get one because he has this “contingent liability”, which is credited to him as if it were his own loan. Therefore, such a guarantee is not just a friendship service, but a serious thing that can have consequences for the guarantor.
You are not always penniless with poor creditworthiness
There are always consumers whose creditworthiness is only temporarily limited, for example because they have become unemployed or are on parental leave. If you then have other lendable assets, you can use them when a car loan is needed. For example, life insurance, a building society contract or a securities account can be lent. Anyone who owns a securities account is usually granted a securities loan by the custodian bank, which is paid out for free use and can then be used as a car loan.
Credit without credit bureau is rarely the solution
People who need a loan but live in difficult financial circumstances are easy victims of dubious credit intermediaries who promise credit even in very difficult cases. Here, however, the mind should be turned on. Many brokers are only about selling insurance and home loan contracts to earn commissions, not about brokering a loan. Caution is always advisable if the intermediary charges fees in advance. With negative credit bureau and a lack of income, it is hopeless to get a loan without credit bureau.
The Swiss loan
Nevertheless, a credit bureau-free loan can be an alternative if someone who can show a seizeable income wants to take out a car loan in order to buy a used car. However, the total amount of Swiss credit is limited to $ 3,500. If the used one is not more expensive or other sources of money can be tapped, Swiss credit is the optimal solution – but only for employees. The Swiss banks do not grant loans to the unemployed or Hartz IV recipients.