You would like to buy a car, but you don’t have enough money in your call money account to buy the car directly? In this case, the only way to get the car of your dreams is to finance it. There are special loans for vehicle financing that are earmarked for a specific purpose. The interest rates are significantly lower, but you can only use the money exclusively for the car. Get to know the different credit options as well.
Where can you get a car loan?
You have the possibility to obtain a loan for car financing in different ways. For example, you can get a loan from the car dealer or the car bank. Dealer financing is very popular. But also branch and direct banks mediate the loans. A private loan from your personal environment is of course even better, since the interest rates are usually particularly low or are waived entirely.
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What types of car financing are there?
Before you take out an earmarked or a non-earmarked loan, you should still inform yourself about the different types of loans. A distinction is made between:
- Financing without down payment or final installment
- Credit with down payment, without final installment
- Loan without down payment, with final installment
- Loan with down payment and final installment
- Credit for a car without schufa
The credit terms for your loan amount are also an important factor. It is not only about the interest on the loan. These can be creditworthiness-dependent or creditworthiness-independent. The terms and the flexibility of the loan are equally important.
Tip: if you take out a loan, you can pay for the car with cash and perhaps receive a discount. Here we speak of a cash discount.
Ongoing credit – what you need to know
This is the variant for the loan agreement in which you as the borrower do not pay either a final installment or a down payment. You apply for a loan from a direct or branch bank for the amount you want for your dream car. The vehicle financing runs like a normal installment loan. In the case of an earmarked loan, the car is transferred to the bank as security until you have paid all the installments.
A car loan calculator can help you to get an overview of the possible interest rates as well as other loan conditions. This way, the loan calculator will give you a first feel for what a good loan offer might look like.
Tip: perhaps the car dealer will offer you favorable financing with low interest rates. In some cases, the loan is even interest-free. However, you can sometimes save even more if you take out a loan at the bank with a slightly higher interest rate, but still save by a cash purchase at the car dealer.
The loan for a car with a down payment
You would rather have a short credit period? In this case you can opt for a car loan with down payment. This form of financing makes sense if you already have an amount for the purchase together. You should not use the dispokredit for the down payment, since this is accompanied by high interest rates. Depending on the amount of the down payment, the installment amount is lowered. This minimizes the risk of non-payment, as small installments are often easier to service even in the event of financial difficulties.
The loan with down payment can be taken both at the bank, as well as through the car dealership in use. More often, however, the car dealerships make it available.
Final installment financing for the car loan
Another variant is the final installment financing. This is also called balloon financing or balloon loan. Similar to a loan with a down payment, the installments for this variant are also low and the term of the loan is rather short. At the end of the financing there is the final installment. However, this can sometimes be very high. You may then have to take out follow-up financing without schufa or rescheduling, which may even be more expensive. Therefore, you should carefully consider whether the final installment financing makes sense for you.
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Can a loan for a car be taken out without SCHUFA?
You absolutely need a car, but perhaps you already have one or the other note in the SCHUFA? This can have a negative impact on your score. You may then not receive a loan. Here it can be helpful to look for a loan without SCHUFA. Keep in mind, however, that the interest rates for a loan without SCHUFA are set higher. The total cost of the loan increases. In addition, loans without SCHUFA are usually only available up to a certain amount.
Car financing – this is how it can be done
The car financing with constant installments to pay back is still the most popular variant and today also possible without much paperwork. You only have to consider the following points:
- Compare offers
Before you decide on a loan, you should compare the contractual documents of different providers. Pay attention to some important points. How quickly is the loan repaid? What happens if you get into payment difficulties. How fast is the payment of your online loan??
The term is just as important an aspect as the loan payment. If you already have a car in mind, you need the money as quickly as possible. In some cases, the process can be even faster if the loan is earmarked for a specific purpose.
Also pay attention to the additional costs for the loan. Check the net loan amount and look at the comparison portal to see which bank will waive an early repayment penalty if you pay off the loan early. You may also be interested in the question of whether installment breaks are possible.
The pangv stipulates that all data must be presented transparently in every offer – regardless of whether it’s a small loan or a modernization loan. This includes the term of the contract and the net loan amount, but also the final installment, the effective interest rate charged by the lender, and other requirements.
- Submit an application
In the next step, you make the credit request. You enter your name, main residence, income and the amount you wish to borrow. The credit decision in your favor can still be positively influenced if you already submit all the necessary documents. Income statement and proof of salary or pension statement and account statements, proof of residual debt insurance as credit security, term life insurance or other collateral are also a good point. The loan is usually granted within a short period of time.
In the application, you should also indicate the loan installments with which you would like to repay the loan amount. Make sure that the monthly installments match your income. It is better to set the amount a little lower and to pay off the loan more quickly with special repayments.
Tip: for your own safety, you should protect the vehicle with fully comprehensive insurance as long as it is being financed.
- Carry out identification
Once you have received credit approval for the loan you want, all that is missing is the legitimation of your loan request. This can be done by postident or videoident. So make sure you identify yourself at the post office or online. Many consumer loans can already be accelerated today via online legitimation. Then you receive the payment of the amount.
You do not actually want to take out an instant loan? In this case, a leasing contract is an alternative to a loan. Here you can also negotiate good conditions and leasing rates and get a new vehicle. In the case of leasing, however, you should also insure the residual value of the car as well as any unforeseen events.