A new car in a hurry? Very few people can afford this. According to statistics from the central association of the german motor vehicle trade (ZDK), a new car in 2015 has average 28.590 euro cost. Many car buyers therefore resort to a loan to pay for the new vehicle. What you should bear in mind when taking out a car loan, you can find out below.
This is how a car loan works
With a car loan, you pay back a fixed installment every month within a certain term. The lending bank charges a certain interest rate for this. This is, depending on the provider, creditworthiness-dependent or creditworthiness-independent. With creditworthiness-independent loans, every borrower pays the same interest rate. In the case of a creditworthiness-dependent interest rate, the credit institution calculates an individual interest rate for you. This depends on your creditworthiness. To determine it, the savings bank or bank checks your financial situation. To do this, you need information about your monthly net income, any additional income and regular expenses. In addition, the bank checks your payment history with credit agencies such as SCHUFA.