The car loan is one of the most common loan options in Germany. It is often the case that a certain amount of money is borrowed to buy a car, which is then paid off in monthly installments over the agreed term. At the end of the term, the debt is settled.
But there are also car loans that ultimately leave a so-called residual debt. Remaining debt, which means that the debt is not fully paid at the end of the term, the debtor still has to make payments. During the term, only the interest or a low rate is usually paid here.
In the end, this leaves a remaining debt. This is then usually paid in one sum by the borrower. In rare cases, however, it is also possible that a new loan agreement can be concluded to repay the remaining debt, namely if the borrower is unable to settle the remaining debt in one sum.
Car financing with residual debt means that a certain amount is still open at the end of the term. People often opt for this type of car financing if they have a larger amount of money available at a certain point in time, for example at the end of the term. This can be, for example, a life insurance that is due, a savings contract that is due, an inheritance or a severance payment.
With this money, the remaining debt can then be paid after the loan expires. The advantage during the term of the loan is that the monthly payment obligation is then much lower, depending on the amount of the remaining debt. Whether only interest is paid or whether part is already repaid is independent of the respective situation, the amount of the loan and the amount of money to be expected.
There are many lenders and providers who want to and can offer their customers a car loan with residual debt. However, it is always important here that the bank or the lender has a security that proves that the customer can actually pay the remaining debt at the agreed time. This can be, for example, an insurance policy, a certificate of inheritance or a savings book. Most house banks, car dealerships and also the providers on the Internet offer this variant of car financing. And here too, if you compare at an early stage, you can also save money here.