Applying for a car loan from a bank or lending institution seems trivial to most of us. Yet, for every personal, family, social or professional situation, there are very specific criteria for being granted credit.
If you are single
Being single, the application for auto credit is quite possible, but it obviously depends on the professional and financial situation of the person. Banks and credit institutions lend more readily to an employee on permanent contracts or to a civil servant, rather than to a single person on fixed-term contracts or unemployed.
The key is to continue to live normally despite the weight of monthly payments that will weigh on the budget. As long as the debt ratio does not exceed 33%, the lending organization will give its approval. If the employment situation is quite precarious, it will obligatorily ask a co-borrower or a guarantor so that the credit application can be validated.
If you are married
In the case of married persons, the majority of credit agencies and banks require the provision of spousal data, even if it is a personal credit application.
The reason is simple: the law imposes it by the principle of solidarity of the spouses ( Article 220 of the Civil Code). To summarize, this law indicates that for all the expenses of the daily life of the home, the spouses must be in solidarity with all the debts subscribed by one or the other spouse.
In the case of married persons, the spouse of the borrower will be obligatorily co-borrower (except some banks that accept a credit without a spouse, but this is rare), and the income of both spouses will be taken into account.
If you are pacsé
PACS follows the same rules as those for marriage. Even if one of the two pacsées wants to make his own credit without a spouse, this will not be possible legally ( Article 515-4 of the Civil Code).
As with marriage, PACS partners are in solidarity with the debts incurred by one of them for the needs of daily life, except in the case where the expense is excessive (for a sports car of big brand for example) . In this particular case, the law considers that this expense is leisure and not the needs of everyday life.
If you live in a relationship
When one lives in concubinage, no official document stipulates the life with two. As a result, there will be no legal constraint: banks and credit agencies leave the choice to their client to take a co-borrower or not.
If he makes the choice to apply for his auto loan alone, it is normal that his only income is then taken into account. But suddenly, the request will be less likely to be accepted. This is the same as for the case of a single person.
If you are divorced
It should be known that any credit car contracted during marriage or during a divorce procedure requires both spouses to be in solidarity, even after the judgment pronounced.
On the other hand, once the divorce is pronounced and judged, date of the authentic judgment, each of the two partners find themselves in the same situation as a single person (see paragraph “If you are single”).
This means that the divorced person can apply for a car loan on a personal basis, provided that his file is validated by the bank (outstanding debts, debt ratio, financial situation, professional situation, etc. Everything will be checked).
It is therefore strongly advised to wait for the final pronouncement of the divorce before contracting a car loan. The situation will be all the more clear and the steps easier.
If you are a student
Being a student and applying for a credit may seem incompatible, and yet that is entirely possible. In addition to the precarious situation of a student, banks and other credit institutions are not so reluctant to allocate loans to them, but of course they do so under certain conditions.
The financial resources of students are varied: help from parents, scholarships, odd jobs, etc. So, provided you have a reliable guarantor or guarantor (usually the parents, but the state can also do so), the student can be granted a student loan that can, among other things, be used by the student. ‘to buy a car.
The rates of this type of loan are generally more attractive than conventional auto loans, because banks consider students as future economic actors (new sources of investments in perspective).
Another thing to know: the more advanced the student is in his studies, the more generous the banks are, even sometimes offering Zero Rate Loans if they are small amounts!
If you are a young driver
Young driver often rhymes with student, but not always! Some banks agree to lend to young drivers, but under certain conditions: that the price of the car is not too high (used car), that the young driver is able to pay the young driver insurance (often more higher than the others), and that there is a guarantor for the application to be validated.
This is a lot of factors, especially when there is no personal input and low income. However, there are other alternatives, such as the help of employment center or CAF, in case the vehicle is needed for professional reasons.
That said, many banks play the game of auto credit granted to the young driver if he takes his car insurance and other banking products in the same establishment.
If you are acting
Banks are not reluctant to give car loans to temporary workers, but certain criteria must be respected:
- you must have a minimum of 18 months of experience in the interim (this is proof of a certain professional stability),
- you have to work in a dynamic sector such as: IT, hotels, accounting, etc. These sectors inspire more confidence in banks than seasonal jobs for example,
- you have to meet the criteria of the good borrower: debt ratio below 33%, ability to save, no banking incident, …
If all of these criteria are met, many banks will give car loans to the agency, provided that it does not exceed a certain ceiling and remains at a reasonable level.
If you do not have a pay slip
When you do not have a pay slip, so no declared salary, there are 3 solutions to hope to be granted his auto credit:
- revolving credit (or revolving credit): some banks may not be very watchful about the creditworthiness of the borrower and may agree to grant a revolving credit to purchase a vehicle.
- micro-credit: this can be obtained from CAF provided that certain criteria are fulfilled (people on the sidelines who want to buy a car to find work, for example).
- the loan between individuals: the acceptance is not guaranteed, but the negotiation is easier than with a credit organization! However, we must expect to provide guarantees (mortgage, guarantor, …) if the person with no declared income really wants to obtain credit.
If you are at RSA or unemployed
It is very complicated, if not impossible, to obtain a car loan strictly speaking when one is a beneficiary of the RSA or unemployment benefits.
The only solution is the social micro credit. It can be awarded by the CAF or by humanitarian associations, but its amount will be small. The employment center also supports the beneficiaries of social minima in the context of mobility.
In any case, being at the RSA remains a vicious circle: we do not work, we perceive the RSA or unemployment benefit while waiting to find work; most job offers need to be conveyed, but it is complicated to get a car loan given its location …
But to the impossible, no one is bound: when one wants, one can! And thanks to help from the CAF and the Employment Center, it is possible to make a small loan to buy a small used car and start a new professional life.
If you are at the SMIC
Touch the SMIC and apply for auto credit is fully compatible. Except that, who says small salary, says little credit simply! Banks do not refuse requests for car loans to people earning the SMIC.
They are just studying on a case-by-case basis, and can sometimes grant to exceed the famous threshold of the 33% of indebtedness, provided that the monthly payments remain low (about 100 USD per month). Banks will often advise revolving loans whose rates are sometimes lower than other personal loans or consumer loans. But from the moment the person has a salary, even small, everything is achievable.
If you are on a fixed term contract
Contrary to popular belief, an employee on fixed term can quite contract a credit to buy a car. However, certain conditions must be fulfilled:
- the total duration of the loan can not be greater than that of his employment contract,
- the amount of monthly payments must be less than one-third of the employee’s income,
- statements of account must be provided and expenses declared, in order to avoid over-indebtedness,
- there must be no banking incident on his bank account,
- the possibility of saving will provide an additional guarantee.
The employee on fixed term will thus have all his chances of obtaining his credit by fulfilling all these conditions.
If you are on a permanent contract
Unlike employees on fixed-term contracts, employees on permanent contracts have before them the open doors of banks when it comes to applying for a car loan. In fact, the employee on permanent contracts necessarily offers more reimbursement guarantees than an employee on fixed-term contracts, because his financial situation is much more durable and secure.
The risk of non-payment is lower, and the duration of the credit can be long. For these reasons, it is much easier for banks to grant CDIs, provided, however, as always, that the debt ratio does not exceed 33% (in some cases even more!).
If you are disabled
Even if legally, a disabled person has the same rights as a valid person, the reality is often quite different. Many credit organizations refuse loans to people with disabilities.
But fortunately, devices have been put in place to alleviate this problem and allow them to obtain a car credit like everyone else:
- the AREAS agreement, which aims to provide access to the borrower’s insurance necessary to obtain credit,
- social micro-credit: the organization ADIE is in charge of guiding you towards this device often proposed by the CAF,
- car loan: some insurances offer this loan to build a vehicle for a handicap.
In any case, to be sure of being granted the car loan, the disabled person must first be solvent.
If you are retired
Borrowing when one is retired, especially after age 70, is sometimes part of the obstacle course. The older the borrower, the greater the health risks and therefore the non-payment.
Insurance is optional for a car loan, banks will refuse you the credit if you do not want to subscribe to high insurance. On the other hand, the lender will be more interested in the age of the borrower at the end of the loan: he will adjust the duration of the loan accordingly.
In conclusion, it is not impossible to apply for a car loan at retirement age, but there will be more proof required and additional guarantees needed for everyone to benefit from it.