If you are unemployed, it will always be difficult to get a loan. Drawing up a file for applying for a car loan is therefore a hell of a job if you have no work. Only if the need for a loan is very high can a lender consider giving you a loan. Sometimes you even need to have a contribution of a certain percentage of the loan amount. But if you have no work and you do not have this input, it is sometimes still possible to get a car loan. You must then meet certain conditions set by the credit providers.

Legal protection of the unemployed against irresponsible borrowing

Legal protection of the unemployed against irresponsible borrowing

Another obstacle that can explain the reluctance of lenders is the law that protects the unemployed when they cannot meet the monthly repayments. It is impossible to start an attachment procedure on unemployment benefits. A credit provider must therefore be able to anticipate a certain flexibility in order to get the unpaid loan back from an unemployed person who can no longer pay it off.

Conditions for getting a car loan as an unemployed person

Conditions for getting a car loan as an unemployed person

Getting a car loan as an unemployed person is absolutely difficult in Belgium. However, there are some conditions that sometimes make it possible:

  • A bank guarantee: you then have a deposit or a guarantee. In other words: your loan contract is signed by a co-borrower. However, this co-borrower may not be insolvent with a financial institution or have a registration with the CKP.
  • You have your own house or other real estate. Your property will then be placed under a mortgage and will constitute a guarantee for the lender. The chance that you will receive a car loan will then increase considerably.
  • A start-up credit for the unemployed: this is a loan that is granted if you want to start a business or an activity that will generate income as a result of unemployment. However, certain conditions are attached to this loan, such as:
  • the applicant for the loan must be unemployed for at least three months,
  • self-employed person will have to become the main occupation,
  • the Participation Fund must approve the activities,
  • the likelihood of success of the activity must be assessed.

You can then finance a car with the help of part of the start-up credit, provided that this is necessary for your work.

Prepare the application for a car loan

Prepare the application for a car loan

If, as an unemployed person, you want to prepare a loan application accurately, you must proceed with extreme care. It is fairly easy to compile a file that meets the requirements of lenders, but due to the pressure you can make mistakes that will stand in the way of allocation. In addition, the preparation of an application for a loan will require accuracy. For that reason it is better to leave the application to an expert in the field of credit provision in certain cases.

Which documents are necessary for a car loan for the unemployed?

Which documents are necessary for a car loan for the unemployed?

The documents required by the lender are the same as for people with a job who want to apply for a car loan. Credit providers even tend to go through an unemployed person’s file with extra precision. The documents that you put in the file must therefore prove your identity and your financial situation, and possibly even serve as proof of your unemployment. You must include the following documents in the file:

  • a valid proof of identity,
  • proof of direct debit, such as an electricity, gas or water bill,
  • a recent tax assessment,
  • the account statements for the last three months,
  • documents that can prove your unemployment.

Compare different loans and providers

Compare different loans and providers

Regardless of whether you are unemployed or not, comparing multiple loan forms and providers will always be crucial to finding the most favorable car loan. With such a comparison you should pay attention to:

  • the effective interest rate (and not just the nominal interest rate without the additional borrowing costs ),
  • the duration of the loan,
  • the offer and the type of loan you want to take out,
  • the set repayment terms,
  • the way in which indexation is applied.

Of course you must always accurately calculate your repayment capacity in advance so that you do not have to deal with payment arrears and the like afterwards.