For people, a car means freedom, independence, flexibility and joy. For self-employed people, their own car often stands for wages and bread. They need it to do their job, to keep in touch with their customers or to deliver their goods. But automobiles are expensive. Very few people can pay for a new car on their own. Car loans (special financing offers that are specially tailored for the purchase of a vehicle) help to solve this problem, but it is difficult to obtain car loans for the self-employed.
Auto Loans for the Self-Employed: The Problem
The problem that the self-employed have when borrowing is the so-called credit default risk. The banks fear that the repayment of a loan may burst and want to protect themselves from it with collateral. The simplest security that a person can offer is their salary, which shows whether they can manage a repayment or not. The self-employed do not have a constant salary and therefore cannot offer this security. A bank would not oppose lending to a very wealthy self-employed person who has real estate and other assets, but this group of people does not even need a car loan.
Auto Loans for the Self-Employed: Solutions
Of course, there are still ways in which less well-off auto loans are granted to the self-employed. The lower the desired amount, the more likely the bank will be to approve the application, even if the self-employed have little income. If necessary, the borrower can also call in a guarantor who guarantees part or all of the loan. If the repayment of the loan fails, the bank can keep the guarantor harmless.
If the self-employed does not know a suitable guarantor, he can search online for offers from banks that offer car loans without credit bureau. credit bureau prepares the risk assessment for German banks. If a financial institution offers a car loan without credit bureau, this risk assessment is not carried out and it is therefore much easier to get one of the car loans for the self-employed.