The worker was unemployed for a long time and is finally back to work. Most employers agree on a trial period with their employees, which varies. Some are four months, others are six months. This time serves to get to know each other and to recognize whether this company meets the wishes of the employee.
The same naturally applies to the entrepreneur. With all the joy of finally being back in professional life, the question of a car often comes immediately. The workplace is difficult or impossible to reach by public transport. The employee needs a car loan during the trial period.
The last income was paid in unemployment benefits
In the event of long unemployment, wishes also had to be put back. Only 60% of the last income was paid in unemployment benefits, which of course only covered the most important monthly items. But besides fulfilling the wish, there is also a car loan during the trial period. The job cannot be reached by public transport, there has not yet been a ride.
The employee thinks about a car loan during the trial period. After all, he is now getting his normal income again. But banks want collateral when lending. Not only does it consist of income, it also requires permanent employment. Of course, the employee cannot offer this during the trial period.
Neither banks nor the employee know what is after the trial period, unemployment will come again or the employee will be taken over. A constellation that often leads to a loan refusal. The worker also has no protection against dismissal; from one day to the next he can stand on the street again. Those who have credit opportunities at all should not choose the most expensive car when buying a car.
A new car is of course an investment for a long time, but also very expensive. In this situation the employee would be advised to look for a used car, at least until the employment relationship is unlimited. If you only have to drive from A to B, you can reduce the high acquisition costs with a used car.
Another situation arises when the employment contract is automatically extended. Here, banks make different decisions from case to case and, as an exception, could grant a car loan during the trial period.
If the employee can provide collateral, his credit chances increase. Think of a property or a life insurance that can be lendable. But a second solvent borrower or guarantor is also recognized as security. However, both people must have a sufficiently high income that is above the attachment limit. An open-ended job is also necessary, as is a clean school.
The bank will examine these people closely. The second borrower could be the partner or a very good friend. In these cases, it is often advised to take the solvent second borrower as the main borrower. The loan application then runs to him. This credit constellation is often found in married couples. The guarantor must also be solvent. However, a car loan poses a high risk to a guarantor during the trial period.
The guarantee is entered in the guarantor’s surety and can reduce his creditworthiness. This can be seen when he himself needs a loan and is rejected by the bank because the creditworthiness is insufficient. The creditworthiness is added to the banks’ budget when lending. If a surety is then carried out, the guarantor is in a real gag contract. The borrower only has to make it clear that he can no longer pay and the guarantor has to step in. The bank does not need to initiate time-consuming dunning procedures.
If the worker decides to buy a higher-priced car, he could take out a dedicated car loan. The vehicle letter must then be deposited with the bank for security. These loans are often cheaper than the other installment loans.
The car loan during the trial period at the dealer
The worker can also buy his car from a car dealer. These work together with the various car banks and often offer very good conditions. But many car banks require a cash payment of at least 25% of the purchase price. The vehicle letter will also be retained. If you do not have that much cash, you might be able to trade in an existing car.
Car banks also offer so-called balloon financing. For the customer who wants a larger amount of cash in the foreseeable future, reasonable financing is expected. With this type of loan, only interest is paid during the term of the loan. The large final installment is due at the end of the term. Who now has the necessary funds to pay the final installment owns the car. But many borrowers have to seek further funding for the final installment, which should be a bit difficult in the case of his trial period.
However, the chances are high that the loan can also be paid in the event of recurring unemployment. If the above amount is available at the end of the term, this car loan would make sense during the trial period.
Given the somewhat unclear economic situation of the loan seeker, the bank will offer residual debt insurance. This not only protects against unemployment, but also against disability due to illness and death. However, the individual restrictions of this insurance must be observed. In the case of unemployment, for example, it only occurs if the employee has become unemployed through no fault of his own and if he has paid into the insurance for at least six months.
There are also restrictions on disability due to illness. Many diseases are excluded from residual debt insurance. Here, too, the restriction must be carefully controlled. Residual debt insurance is also very expensive. The premiums are added to the loan amount, and the customer then pays interest for the insurance.
The credit rating
Not only the bank but also the employee should draw up a budget. He puts his income against the expenditure, which in the best case gives financial leeway. If nothing is left, everything goes from zero to zero, you should refrain from a car loan during the trial period.
In addition to the sufficiently high income that has a attachable share, the Credit Bureau must also be impeccable. Negative entries are an additional reason to refuse a loan. The loan seeker does not receive the Credit Bureau-free loans, which can be a last lifeline for such people, because these banks require a permanent employment relationship that does not include a trial period.
If it is feasible, you should wait with the car loan during the trial period until the customer is firmly accepted.