A whole range of credit institutions now also offer car loans for freelancers. This is a positive development, since in the past freelancers, like other self-employed, were only able to find funding in exceptional cases.
Freelancers belong to the professional groups of doctors, lawyers, tax consultants and the artistically and creatively active self-employed. The focus of freelance work is on intellectual work that can only be performed by the freelancer himself. He does not produce or trade goods. Freelancers do not need a business registration, but are not exempt from VAT. Just like other self-employed people, you have to prepare a profit and loss account for submission to the tax office.
The very nature of their work alone makes it difficult for freelancers to demonstrate a fixed monthly income. Your income is calculated on the annual average after the tax return has been prepared. This means that they have difficulties in presenting banks with the necessary evidence. The auto loan for freelancers is a special loan that some banks exclude from the outset, even if many freelancers belong to the higher income bracket.
House bank and car bank
The car loan for freelancers is often granted through their house bank or a bank affiliated with the car dealer. The house bank in particular has the advantage that, as an account-maintaining bank, it can have a good overview of the financial situation of the freelancer and assess its performance. For freelancers, on the other hand, this means that they have to accept the terms of their house bank. He has little opportunity to compare and the savings potential that employees have with their free choice among a variety of loan offers remains closed to him.
In this case the direct financing of the car dealership is cheaper. The car dealerships that sell classic business cars are less reluctant to arrange a car loan for freelancers. However, it is possible that the risk must be covered by a guarantor who has a regular income from work, especially for a freelancer who has not been active for a long time.
Given the professional groups that are freelancers, many credit institutions have now changed their lending strategy. The offer for a car loan for freelancers has grown significantly. However, the requirements are stricter than when applying for a loan for an employee with regular monthly income. Freelancers must submit their profit and loss accounts, which should result in a reasonable monthly income.
In addition to the private creditworthiness, which is verified by credit information, more information is usually obtained from the credit bureaus of the private sector. Depending on the bank, a car loan for freelancers is limited in amount. The risk assumed by the banks is offset by higher interest rates. On the other hand, the freelancer also has more options to tax all costs related to the purchase of a vehicle. The annual interest expenses are part of these tax benefits and compensate for the amount of the car loan for freelancers.