Car financing is usually possible without any problems. But those who are burdened with negative entries, for example, by a loan default in his credit, will quickly experience a disappointment. But still, a car loan with negative credit is possible.
The car loan with bad credit has a higher interest rate
Very rarely will a loan request for a classic bank on a bad credit be successful. Alternative financial service providers make the Internet available. As the demand for non-scholarly loans continues to increase, a large number of service providers have specialized in this group of people. Not only the growing market is the decisive factor, also good returns can be inserted.
Because a car loan with negative credit is provided with risk premiums, which entail a high effective interest rate. The normal loan amounts needed for a car purchase usually range between 5,000 and 15,000 euros. For these loan amounts, with good credit ratings, interest rates around 5% are feasible. In a car loan with negative credit, this interest rate will double. The entry in the credit is indeed a disadvantage in the search for credit, but not only relevant. Much more important to the banks is their regular income.
That should be higher than the seizure-free limit. Since the income is the only guarantee for the loan, a comprehensive wage assignment is required. In other words, in the event of a loan default, the garnishment is carried out immediately. For a car loan with negative credit not only moderate income should be present, but should also be small, the number of people for which the borrower has to pay.
The chances of success
Unemployment benefit are not accepted as income. Even those who have a fixed-term contract or are still in the probationary period, for whom there are bad prospects for a car loan. In addition, the age of the borrower must be between 18 and 58 years. A second borrower, co-applicant, could have a positive impact on credit.
To consider as a disadvantage are further loan commitments, because thereby decrease the funds for the new installments. The sum left after deducting all obligations should be so high that the car loan with bad credit can be repaid quickly. Cheaper conditions are then also available.
The term is also linked to the interest rate. Should there be a cheap loan, the term should be 48 to 60 months. Especially with a car loan with negative credit should be remembered that the car is a crucial security for the loan. The loan should not run longer than the car is used. Otherwise, there is a risk of over-indebtedness when the next car purchase is due.
Progress does not stand still, banking services are improved every year. Today, you can get some types of loans and get money without personal contact with the bank. Everything is done remotely. Unfortunately, this cannot be said about this type of loan as car loans. Although today it is possible to submit an online application and get a preliminary decision from the bank.
Such an opportunity saves a borrower’s time considerably, since he can simultaneously send such questionnaires to several financial institutions.
Having received the answer and preconditions, you can choose a profitable and most economical option for yourself. And after already prepare a package of documents and go to the bank for registration of car loans.
You can apply online for a new or used vehicle. The borrower is obliged to indicate in such an application reliable information about himself, his income, family composition, place of residence, work.
If the client indicates incorrect data, he will be refused a loan, if not during the preliminary processing of the questionnaire, then as a result, when he brings the package of documents to the bank.
Today, almost every bank can send an online application. Banks provide various options for car loans, including with state support, under special programs (in collaboration with car dealerships, dealers).
Today, you can get a car loan within a few days, without providing collateral. The collateral is a purchased vehicle.
Only in some cases, the bank asks for additional liquid collateral or guarantee.
Car loans are available from six months to five to seven years. Rates depend on many parameters, and are calculated individually for each customer.
It is allowed to issue car loans without acquiring CASCO policies, life insurance, without providing certificates of income and without making a down payment. But under these conditions, the loan rate will be very high.
Ways of registration
Making a car loan remotely is easy.
To do this, it is enough to have a computer with Internet access and:
select a bank or several different financial institutions and submit online applications;
wait for preliminary decisions from banks, review the proposed conditions, dwell on the optimal offer for yourself;
choose a car (if you have not yet decided on the model);
collect personal documents and documents for cars;
make a down payment;
issue insurance policies (CASCO, life and health insurance);
sign a loan agreement with the bank and get your car.
What banks issue car loans online?
You can submit an online application to several credit institutions at once, after receiving a preliminary response, to select the most advantageous offer for yourself.
In the table we give the basic conditions for car loans, but they may differ from those offered by a credit institution after processing the data of a potential borrower.
– on a new car300,000 – 5,000,000- from 7.67%;
– 14.0%½ – 5 yearsIt is possible to design with CASCO, without insurance, under special conditions Bank3,000,000from 18.5%up to 5 yearsAdvance payment – from 15%VTB 24 (several different autocrediting programs)5,000,000from 19.9% Advance payment – from 20%-Bank: – standard terms;
– for card holders and employees of partner companies
– 3 000 000;
– from 21.49%
– from 17.99%1-5 years
Advance payment – from 15%
Advance payment – from 10%ICD4,000,000from 16%½ – 7 yearsAdvance payment – from 15%
Requirements for borrowers
For customers wishing to get a car loan, banks express certain requirements, mainly they are as follows:
borrower resident of the Russian Federation;
the client has a permanent registration and residence permit in the region where the bank branch is located;
age – 18 (23) – 60 (65) years;
the presence of seniority – from 1 year.
positive credit history.
In addition, banks may require the fulfillment of other conditions, for example: the ability to provide liquid collateral, provide a guarantor, provide a certificate of family composition, the absence of debt for various obligations, etc.
The fee for the use of the loan consists of several parts: the body of the loan, interest, bank commission fees, penalties, etc.
All components, except for the interest rate, are fixed.
The following parameters affect the car loan rate:
initial advance payment;
purchase of life insurance and hull insurance policies;
condition of the car (new, used);
client status (salary client, employee of a partner company or a borrower under standard conditions).
Also, the lending program influences the interest rate, for example, car loans with state support can be issued at a rate of 7.67% per annum, while standard lending programs offer loans from 14.0-19.9% per year.
List of documents
To issue a car loan, a bank customer needs to collect a small set of documents consisting of:
copies of employment record;
documents confirming solvency (certificate of employment, bank form, account statement, etc.);
vehicle purchase agreement;
a copy of the passport of the car, certified by the dealer, personal manager of the car dealership;
documents confirming the payment of the initial advance;
invoice for payment of a part of the car cost
invoice for payment or documents confirming the payment by the hull insurance policy.
The Bank has the right to demand other documents, including the provision of liquid collateral or a guarantee of an individual.
The online application, which the future borrower submits to the bank, is processed within a few hours, after the client receives a notice of the preliminary decision of the bank.
Terms of car loan programs are standard from 1 / 2-1 years to 5-7 years.
The borrower has the right to repay the debt ahead of schedule and close the loan. But before you do this, you should read the agreement carefully and clarify whether there are any commissions for such an operation.
Today, only a few banking institutions charge a commission for such an operation.
The client has the right to repay the debt in any way convenient for him.
This can be done online, using client-bank, either:
in the bank, through the cashier;
in other financial institutions.
Choosing one of the above methods, it is necessary to clarify whether there is an additional fee for the transfer of funds and take this circumstance into account when calculating with the bank.
The car loan itself must be repaid once a month, according to the schedule attached to the loan agreement. Payments can be equal or “falling” (decrease every month).
For late payment of the next payment, the bank charges a penalty, its amount can be viewed in the loan agreement.
In addition, an employee of the bank can transfer the loan file to the credit bureaus where the borrower’s rating is likely to be lowered.
Pros and cons
The obvious advantage of online car loans can be called the following points:
apply and get a preliminary decision can be without leaving your home and immediately in several banks;
various options (programs) for car loans;
design of new and used cars;
the possibility of registration without the purchase of insurance policies (CASCO, life and health).
The disadvantages can be safely attributed to the fact that, despite the screaming name “online car loans”, it is impossible to arrange this type of loan remotely.
The borrower still needs to personally (or through the personal manager of the car dealership) submit a package of documents to the bank, and then come to the loan officer to sign the loan agreement.
All that is embedded in the concept of “online” is the filing of an application via the Internet for a loan, being outside the bank.