If self-employed want to get a loan, then they certainly will not have it easy. They also have difficulties if they want to have a car loan for the self-employed. There are many lenders today who exclude freelancers and the self-employed from lending. There are only a few lenders who lend to the self-employed and then only with certain conditions. The justification for the rejection of credit or the difficulty in lending lies in an increased credit default risk and a significantly higher processing costs. The processing effort is simply too high for many lenders, because these requests from independent persons can not be processed automatically. See http://dietetique-sport.com for an illustration
How do self-employed people get a car loan for the self-employed?
Many manufacturers work together with automotive banks and there is a possibility for the car loan for the self-employed. The self-employed have very good opportunities here, but also here the processing takes much longer. While salaries and a household bill are sufficient for salaried employees, freelancers and the self-employed require significantly more documentation. The lenders want to see the current BWA for self-employed, a bank information is obtained and it is required information from the credit bureaus Creditreform or Burges. Before this can lead to a credit decision, all these documents are needed. All in all, there is also a basic requirement and thus a self-employed person has to run the business for more than three years.
The conditions are even stricter for business start-ups, and even here approval is far from certain. There is no regular income for a self-employed person and therefore the credit risk of default is higher. Banks usually have specially selected individuals who alone are authorized to issue a car loan approval for the self-employed. Even with a permit, the requirements are then for the self-employed much stricter than normal employees. Apart from the VAT, the self-employed have to pay in part still 25 percent.
What should be considered in car loan for the self-employed?
If a car loan for the self-employed for private and not for commercial purposes is needed, then the chances for a car loan are very good. However, the self-employed must bring a higher down payment and the credit bureau information must be in order. The lenders then often require an additional hedge of the loan, which is why a residual debt insurance is completed. So that the desired car loan is obtained, the self-employed should complete this. It is very advantageous that the interest rate is fixed for many auto banks. Thus, the self-employed can receive the same conditions as the private borrowers.