Car dealers and banks refer to a car loan as a car loan. They grant this at lower interest rates than a non-earmarked installment loan, since the buyer transfers ownership of the car to the lender until the loan has been paid in full.
The cheapest interest is offered by the vehicle loan arranged through the dealer to the car bank, but when borrowing from an independent commercial bank, the buyer can negotiate an attractive discount on the vehicle price. Proof of salary is always part of a loan application, specifically banks require at least the last, but often also the past three, monthly statements. Loans without proof of salary are offered for small loan amounts due to the simplification of processing.
Who is the vehicle loan without proof of salary suitable for?
If vehicle buyers can apply for a car loan without proof of salary, they are still obliged to honestly state their income situation. Untrue information in the car loan application is not only punishable, but can also lead to a loan termination if it is discovered, even if all installments are paid on time. Thus, the car loan without proof of salary is not suitable for prospective vehicle buyers who have too little income to buy a car and who want to hide the fact that the car dealer or bank.
Rather, the car loan without proof of salary is ideal for people whose income is made up of different components. Many banks only take regular income from their main job and possibly child benefit into account in the household account, while ignoring minor fluctuations in secondary income. In the loan application, however, they mostly ask about income without disclosing their calculation method.
It is therefore legal for the applicant for a car loan to add up all the available income as household income and to state the total value in the car loan application. However, it is important that the income considered by the applicant can actually be earned throughout the credit period, as improper car loan repayment will result in the loss of the car serving as security.
Requirements for car loan without proof of income
In view of the small amount of financing, the vehicle dealer is happy to grant a car loan without proof of salary if the buyer purchases a cheap used car. This is especially true if the selected vehicle has been in the car dealership’s yard for a long time and the car dealer welcomes every opportunity to sell it. New car financing without proof of income is also possible, but in this case car dealers generally require an above-average down payment.
A high special payment when buying a vehicle can replace the proof of salary as an element of the credit check, since the availability of a large amount of money indicates the economic performance of the prospective buyer. As a means of sales promotion, dealers and car banks are most likely to grant a car loan without proof of salary if the customer chooses a vehicle with weak sales.
When applying for a loan through the house bank, the latter can also dispense with proof of salary, since it can assess the financial situation of the car buyer based on the account management. For technical reasons, however, this waiver is usually not possible for an online car loan application, so that the borrower applies for the car loan via the branch without proof of salary.