Whether you want to buy a new or used car, you do not have to be on a permanent contract to qualify for a car loan. Many banks offer auto loans for people on fixed term contracts and other personal situations.
A fixed-term contract can replace a person who is absent or face increased activity. This type of contract is also used in many companies that have a seasonal activity and therefore need additional staff for a specific period.
A fixed-term contract can reach 36 months, leading to professional stability for this period. A CDD can allow, for the purpose of evolution, to pass from one company to another and, thus, to forge a significant experience. It can also be freely chosen in parallel to further studies.
In any case, chosen or suffered, a fixed-term contract is a full employment contract and involves remuneration. It is therefore important not to minimize this asset.
If you are on a fixed term contract and have been in business for at least three years without interruption, it is good to report it to the bank because you have a high level of reliability.
The offers offered by banks and credit companies are primarily intended for people who want to buy a first vehicle or replace an old one.
It is obvious that a permanent employee is more reassuring for the banks and that the risk of unpaid is lower compared to a person on fixed term who does not know what he will do after the six months of his contract, for example.
The goal of credit agencies is to reduce the risk of non-repayment. It is up to you to bring them arguments that will tip the balance in your favor: good management of your accounts, constitution of savings and argumentation on the interest that a vehicle represents for you.
The offer of auto credit made to a person on fixed-term contract will be contained by certain conditions, in order to minimize the risk of non-payment.
- The banking organization will lend you a sum of money up to a maximum of one third of your income, rule of 33% of indebtedness. However, this clause applies to all borrowers, including CDI.
- In order to reduce its risk taking, the bank will try to frame the repayment period of the car loan with that of the contract of employment of the borrower. A 12- or 18-month permanent contract holder will therefore be more likely to be granted a car loan than someone whose short-term contract ends shortly.
- As for all credits, the bank will comb through your account statements and analyze your fixed charges to avoid a situation of overindebtedness with this new credit.
- All cases are studied on a case-by-case basis, situations differ greatly from one person to another. An individual will manage to save with a salary of 1500 $ per month while another will not manage with 2000 $ monthly.
- If you have several credits, you may be offered by your bank a combination of your loans already contracted and the inclusion of a car loan.
In conclusion, do not hesitate to compare different car loan offers, especially if you are on fixed term.