A loan to finance a car if you only receive benefits can often be difficult. Before you take out such a loan, it is also advisable to see whether this is justified. If you cannot repay the car loan with only your benefit, then your financial problems may become even greater. You must therefore always carefully check whether there are no other solutions to finance your car.
Borrow with a benefit
The type of benefit you receive actually makes little difference when borrowing to finance a car. It makes no difference whether you have to make ends meet from, for example, unemployment benefits or invalidity benefits, in all cases your income will be the same as that from a full-time job. Banks, however, are commercial institutions and therefore aim to make a profit, so taking out a loan with a benefit can entail quite a few obstacles.
Seizure of persistent payment problems
It is very important for banks that you can repay a loan as agreed. If you do not succeed in doing so on time, you may be able to seize your benefit, just as can happen to someone with a salary. However, a lender will never be able to seize your entire benefit.
In principle, it is therefore also possible to seize benefits, but not the full amount. Moreover, there are a number of exceptions that in principle cannot be seized:
- an allowance for orphans,
- a living wage,
- an allowance for the disabled,
- child benefits,
- income guarantee for the elderly,
- financial support from an OCMW.
Maintenance creditors are an exception to this rule, but they can seize the aforementioned income.
Calculate the expected monthly charges
As a rule, a benefit is not a huge sum of money. The moment you want to take out a loan while you have to make ends meet with a benefit, then you have to take into account the fact that there won’t be much money left to live on every month. With a temporary benefit and the prospect of resuming your work, your situation is considerably more favorable. However, even in that case, a lender will often assume the current situation.
Perhaps before you take out a car loan, you can better check if there are no other solutions to raise the necessary money. You may have items at home that you no longer need, but that you can still sell.
Which loan is possible with a payment?
To be able to take out a loan with a bank, you must have income from work. With smaller loans, benefits are of course also considered, but taking out a car loan for a new car of, for example, 20,000 euros will not be possible.
Take out a mini loan with a benefit
Taking out a mini loan with a benefit is often no problem. Often you can even take out such a small loan (a maximum of 1000 euros) if you are mentioned on the black list of the CKP. However, you must bear in mind that a mini-loan is relatively expensive, even if it concerns a small loan amount. A mini-loan can also be regarded as expensive compared to other forms of loan. Moreover, you will have to repay the money that you borrow through a mini loan within a short period (within three months).