Car loans are used to finance a car and are secured above average thanks to its security transfer. Nevertheless, a good Schufa, as well as a sufficient income from work, is required for lending.
In other cases, the car loan can be taken out together with a guarantor. This is responsible for paying the loan installments as soon as the borrower can no longer meet his obligations. Car loans are usually granted with a joint and several guarantees, under which the guarantor can be drawn on without the borrower having to be previously enforced.
The financial institution must make high demands on the economic performance of the guarantor in the case of a car loan with a guarantee on the economic performance of the guarantor. In addition, he must be informed of the possible scope of a guarantee given.
Car loan with a guarantor about the dealership
If vehicle buyers apply for a car loan with a guarantee through the car dealership, they receive a very low-interest rate. The car bank lends the vehicle loan particularly cheaply if the buyer chooses a model with unsatisfactory sales figures or a vehicle variant that will soon be replaced.
However, borrowing from the dealer and the car bank only allows a small discount on the list price to be negotiated. Even with used cars, the specific vehicle has an impact on the cost of a car loan. The longer a car is on sale in the dealer’s yard, the more likely the prospect is to get a low-interest car loan with a surety.
Car loan with a guarantor through an independent commercial bank
The car loan with a guarantee, taken out through an independent commercial bank, is associated with higher interest rates than the loan from a car bank, but it enables the buyer to negotiate an attractive discount in a car dealership.
Another advantage of borrowing from a neutral commercial bank is that the amount of interest payable does not depend on the car model you choose. Before applying for a car loan through a commercial bank, a price comparison is essential. It should be noted that various financial institutions only grant car loans for new cars and comparable vehicles such as annual cars and demonstration cars.
What does it mean to be a surety?
If you take out a car loan with a guarantor, this means that the guarantor must have good credit. He guarantees the lender with his assets and is liable with his own assets if, for whatever reason, the borrower is no longer able to continue paying the monthly installments for the car loan.
In the case of a car loan with guarantors, the lender will then contact the guarantor with the entire amount due for repayment. The guarantor can then negotiate with the lender about a monthly payment in installments to repay the loan and must then reclaim the amounts paid from the borrower.