Officials have many options for financing a car, but that may be the reason why they may need more time than other borrowers to choose the really cheapest loan. The conditions at the car banks are equally favorable for all borrowers, so that professional status is irrelevant here. Only the chance that the requested loan will be approved immediately is particularly high.
A loan with interest rates dependent on creditworthiness can be particularly favorable from the conditions because the creditworthiness of the civil servants is rated as particularly good. Civil servants are in a 100 percent secure employment relationship and have a relatively high income, so that they receive a lower interest rate than the average for interest rates dependent on creditworthiness. In this respect, a loan from the direct bank can be cheap. However, officials should also take into account when making their decision that they will have to redeem the car loan later if they apply for an official loan during the term of the loan.
Therefore, the official loan can also be the first choice, because here, too, the interest is cheaper than elsewhere. A civil servant loan is not an ordinary installment loan, however, but a special product that was specially developed for civil servants. Here a loan (the loan) and life insurance are combined. During the loan period, which must be at least 12 years, the official only repays the interest and saves life insurance in parallel. The entire loan is then repaid when the life insurance expires. This variant is particularly interesting if a high-quality car is to be financed. Or if there is an intention to repay other current loans. If it’s just a small car, the direct bank loan will likely be the better option.
With the civil servant loan, the civil servant automatically becomes a cash payer at the car dealer, which gives him the advantage that he can haggle over the vehicle price and, with a little skill in negotiating, can negotiate a large discount on the vehicle price.
It is best if several financing options are calculated in advance and compared with each other. If an official’s credit bureau information is OK, and usually it is, there is nothing standing in the way of a cheap loan.
However, it should not be forgotten that civil servants are only human and there are always people who are not particularly good at handling money. Because of their status, civil servants are more likely to get credit than other people and therefore there is a risk of over-indebtedness. Therefore, officials should also make sure that they do not live beyond their means and do not get into debt. The debt trap does not stop at officials either.