Cheap car financing for trainees
A motor vehicle loan for trainees is possible if certain requirements are met, which we will go into in more detail. If this is the case, then the conditions for the car loan in the apprenticeship are crucial, because here there are differences in the offers of banks and credit institutions.
The lower the cost and the lower the loan interest, the better. The lending rate is specified as the borrowing rate pa and as the annual percentage rate, whereby the annual percentage rate is more important as a comparative figure because it contains the total cost of the loan. If the loan interest depends on the creditworthiness, it is specified with a percentage range. Only borrowers with excellent credit ratings receive the lowest interest. A fixed interest rate, however, is independent of the creditworthiness and is the same for all customers.
However, the term also has an impact on the loan interest. The cheap car loan for trainees does not have any processing fees and hidden costs and should also be flexible with regard to the repayment modalities. Suspension of installments as well as free special repayments or early repayment without costs are points that come into play in a credit comparison.
Inexpensive vehicle financing for trainees can be realized either through a car loan from a direct bank, which is available for any vehicle, or through an installment loan that is not used for any purpose. In the case of a car loan for trainees, care must be taken whether the vehicle letter is to be handed in or not. The apprentice can easily sell the vehicle financed by the loan at any time without having to pay it.
Is car financing possible in training?
Taking out a loan for a car during training turns out to be easier or more difficult, depending on the requirements. The basic prerequisite for any borrowing is the age of majority and a German place of residence is required by the majority of German banks. The creditworthiness is the next most important factor when car financing is being considered in training. A poor credit rating and, in addition, a low training allowance are not successful characteristics for credit approval. If the trainee does not have a negative private credit checker entry and if possible no further loan obligations, the chances of getting a car loan during training increase.
The income of trainees is usually below the garnishment exemption limit of 1,000 USD and is therefore clearly too low for the banks. If no other relevant income, e.g. from a part-time job, can be shown, this is usually not sufficient for car financing during the training. Another point is the security of the training relationship. The banks generally wave their heads off during the trial period, but the situation is different when the trial period is over and, in the best case, the trainee can provide a takeover assurance for the company.
Car financing despite training and insufficient income therefore requires collateral that can be realized with a guarantor or a second borrower. However, guarantor (s) or additional borrowers must meet the requirements in terms of creditworthiness and income. Without a guarantor or co-applicant, there is otherwise no prospect of a car loan for trainees.