Newcomers see their lives very differently when they earn their first money. You start fulfilling your wishes with the first salary and can get a driver’s license or move into your first apartment. However, it is quickly found that the salary of a career starter is not enough to pay for all purchases.
So it is with the purchase of a vehicle, which can cost a few thousand USD. Used vehicles are also almost unaffordable for a trainee. Apprentices can take out a loan for young professionals if they can meet the bank’s requirements.
What is required of the trainee?
When taking out a loan for young professionals, there are a few things to consider. In many federal states it is already possible to obtain a driver’s license at the age of 17. Nobody wants to wait a long time for the car and wants to buy it immediately. Then the applicant is often not yet of legal age, which would cause banks to refuse a loan application. Banks then require the signature of a parent or guardian as security. Only then is a loan application approved. The credit institution will request consent to examine the Credit bureau.
This is requested for every loan because the bank can see at a glance whether the applicant has met payment obligations in the past or not. Furthermore, the bank will request the training contract to see how long the training will continue or whether the newcomer is in the trial period. If this is the case, often no loan is granted. This is because the employment relationship can be terminated at any time during the trial period.
Conditions of the bank
The bank will grant a loan to young professionals with a fixed term. As a guideline, it can often be said that the loan will run as long as the training period continues. This is done primarily so that the young professional cannot get into debt too much. It cannot be seen in advance whether the employment relationship will continue after the training. If this is not the case, the newcomer is left without a job after completing the training and has to receive unemployment benefits.
The bank often grants a small loan, even for a loan for young professionals. So a good used vehicle can be purchased, which will continue to serve for a few years. With the money that is transferred to the checking account, the trainee can pay the vehicle in cash. This has the advantage that the vehicle registration belongs to him and thus also the car.