Self- employed and freelancers can increase their chances of getting a loan
How do you get a car loan for the self-employed?
Many self-employed and freelancers have had the experience in the past that it is not so easy for them to get a normal loan. When it comes to financing a car that is to be used privately, it is usually no different. In order to get a loan at all, it is not the most important thing for self-employed people to find the cheapest loan offer, but to find a bank that gives an installment loan to the self-employed.
Have the appropriate documents ready
Since the self-employed cannot prove an income in the form of a pay slip, they should have other documents ready that state something about their income. On the one hand, there are annual tax assessments and business evaluations that have to be submitted, and on the other hand, authorization is often required to provide bank information so that the bank from which a loan is applied for can obtain information from the house or commercial bank of the self-employed or freelancer. Everyone can now see that a credit decision for the self-employed will not be made in a few minutes. Self-employed people generally have to be a little more patient and often wait for a promise of 14 days or more.
If you submit the necessary documents together with the loan application and put pressure on your account-holding bank to have the request for information answered immediately, you will do your best to speed up the decision. The self-employed, who regularly submit their income tax returns very late, may be left out of the loop when applying for a loan because the banks can hardly do without a current income tax assessment.
Request the car loan from the car bank
Where we always give the tip elsewhere that loan seekers take out their car loan with a direct bank in order to save on loan costs, this is what self-employed people do. For self-employed people, the focus is not on the effective annual interest rate, but on getting a car loan at all. Experience has shown that the chances of a car bank are higher. Anyone who inquires at a car bank as a self-employed person can choose between leasing and financing. A deposit of 20 or 25 percent is usually required for both financing and leasing. This gives the banks some security and also has a positive impact on a loan decision. Anyone who pays VAT in cash has a good chance of getting a loan at the special conditions that apply to private customers.
How banks evaluate creditworthiness
In the case of unsecured installment loans, like a car loan, banks check their creditworthiness against very specific criteria. Many factors play a role here, such as income and amount, employer, age and profession. The freely disposable income is determined via the household bill and the higher the level, the better the credit rating, because this reduces the credit default risk. Anyone who can then prove a faultless payment history through credit bureau has good cards if they apply for a loan with interest based on creditworthiness because they are likely to pay low interest.
Self-employed persons should have the documents already mentioned ready or give them to the dealer so that he can send them to the bank together with the credit request. With a little luck and of course with good business figures and corresponding creditworthiness, there is a much faster decision than with the direct bank. A faster credit decision is often made even if the loan application is made together with the spouse , who can demonstrate permanent employment.