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The car loan despite sick pay – the prospects

The car loan despite sick pay - the prospects

If a person receives sick pay, there is no “minor ailment”. Nobody can reliably predict the course of a serious illness. On top of that, sickness benefit goes hand in hand with the first serious loss of income. But that doesn’t have to be the end of the flagpole.

Possible further consequences would be early retirement or even worse the disability pension. In the latter case, the prospects of ever having another job are extremely poor. The disability pension is usually not enough to live on. These are the possible scenarios that should be considered with car loans despite sick pay.

For every bank mentioned – no matter how high the sickness benefit – an unmanageable risk. On top of that, the bank can rarely actually seize sick pay. The loan rejection is therefore certainly inevitable.

Car loan despite sick pay – limited credit

Car loan despite sick pay - limited credit

The house bank has not yet cut the overdraft facility. It would be conceivable to use this leeway if it is a very small car loan. But beware. Short-term credit is not only extremely expensive, but also relatively risky when it comes to sick pay.

After all, the health insurance company only pays sickness benefit for 78 weeks. The LVA or the employment office then take over the payment. Further loss of income can lead to a reduction in the disposable amount or even cancellation. However, “ordinary accidents” have a special position.

For example, if someone has broken a bone, it is foreseeable when it will heal again. The borrower can return to work after a manageable recovery period. In these circumstances, a car loan would be realistic despite sick pay. But, it is not a credit guarantee. Because employers who fulfill their social responsibility are dying out. In many cases, the dismissal is waiting in the drawer as soon as the employee returns to his job.

Car loan despite sick pay – approval factors

Car loan despite sick pay - approval factors

Banks follow guidelines for approving or rejecting credit. This includes a reasonable income, in combination with a sufficiently high attachable share.

Those interested in credit can see how high their individual income must be based on the currently valid attachment table. According to this, a single person without maintenance obligations up to and including $ 1139.99 is non-attachable.

With every maintenance obligation, the garnishment-free limit shifts upwards. From about 100 USD above the seizure limit, regular lenders give installment loans. It is important to know that maintenance, child benefit or parental benefit do not count as income for a bank loan. Because, like the sick pay, these funds are unencumberable.

In addition, the clean credit bureau is extremely important. Any negative bank automatically rejects negative entries.

Car financing despite sick pay – additional security

Car financing despite sick pay - additional security

Even with a long illness, it is often important to take out a car loan. Banks only grant credit if it is proven that the repayment is safe.

It doesn’t work with sick pay. But, additional collateral underpins the credit opportunities.

It would be conceivable, for example, to deposit the savings contract that has already been paid in but is not yet ready for allocation as security. In the amount of the amount paid in, the real value secures the loan.

Almost obligatory, the vehicle registration document serves to secure the loan “in real terms”. Basically, the vehicle value secures the car loan despite sick pay. The easiest solution is usually a car loan with two people. In this case, the loan application would be made together with a solvent second borrower.

Alternatively, a solvent guarantor would also be conceivable. According to the current contracts, he is then jointly and severally liable.

Car loan despite sick pay – purchase from a car dealer

Car loan despite sick pay - purchase from a car dealer

Anyone who decides to take out a car loan from a trusted dealer will usually receive the “right” loan offer. A car loan via the dealer would be conceivable, even despite sick pay. However, only if the buyer offers a generous down payment. Basically, the calculation is very simple.

The down payment reduces the financing. The loan value of the vehicle significantly exceeds the required credit. This ensures that lending is secure. If the installment is not paid, the car bank takes over the vehicle.

Thanks to the affiliated dealers, the auction usually covers the outstanding claims. The risk of granting a car loan despite sick pay with a high down payment is therefore manageable for the dealer’s bank.

The usual evidence must be provided:

  • proof of identity
  • proof of income
  • bank statements
  • clean credit bureau

It can also be helpful if the doctor confirms that the disease is unlikely to be permanent.

Car loan with sickness benefit – bank loan

Car loan with sickness benefit - bank loan

If the recovery is foreseeable or if the borrower can offer collateral, bank credit is also possible. In this case, too, equity has a positive impact on credit opportunities. Most banks give car loans using the vehicles letter as collateral. Equity lowers the necessary loan amount. The vehicle value thus secures the car loan despite sick pay.

If that alone is not enough, a guarantor or co-applicant can help solve the problem. His support also helps to lower interest costs.

Car loan despite sick pay – bad credit bureau

Car loan despite sick pay - bad credit bureau

In addition to income and permanent employment, the credit bureau must also be in order. Negative entries often prevent credit approval. In such a case, it is particularly difficult to get the desired loan despite wage replacement benefits. Finally, the entries show that payment difficulties have already occurred.

Most of these will immediately come up with advertising for loans without credit bureau. The credit bureau-free car loan is often not a problem despite sick pay in advertising. Such advertising only has nothing to do with reality. Because, as far as can be traced, all real credit bureau-free international loans come exactly from one bank.

It is the Best Bank. This bank, however, rejected the loan despite the sickness benefit in the application conditions. Only employees who are completely healthy and able to work receive credit opportunities. The medical history allows a maximum of 10 days of illness per year.

However, with private loans through one of the major credit portals, there are credit opportunities even with poor credit bureau and illness. Otherwise, only the car loan remains as a problem solution despite sickness benefit from the Freundeskreis.