There are different things you need to look out for to get the best car loan in Nigeria, and we highlight some very important ones here. Trying to secure a car loan is a good deal or a bad deal. How you secure your car loan determines the type of loan you receive.
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There are a few things to keep in mind when securing the best car loan. Of course, it’s not just about going to the bank or car dealership and looking for a loan. There are certain steps you need to take. Here, we take you through steps to help you get the best car loan deal in Nigeria.
Be quick in your decision-making
Because car loan deals are not constant or fixed, you shouldn’t spend too much time thinking about what to do. Start to make your findings and try to secure the deal in one or two months. If you’re spending too much time thinking about it, chances are the deal you got isn’t on the table when you’re ready. Don’t spend too much time thinking.
Stick to the amount you need
While monthly repayments may be attractive, you risk being tricked into borrowing more than you really need. Borrowing may seem like a good deal, but you should know that the more money you borrow, the more interest your bank or dealer earns. So stick to your original plan, regardless of the tasty offers you receive.
Scrutinize the interest rates
There are various banks and dealers with different schemes and interest rates. Some people say whatever they need to hear just to get a deal done, but just because you’ve made a good deal doesn’t mean you’re left with debt you can’t get out of. With this in mind, it would be wise to consult an auto trading expert. Such companies are responsible for giving you the opportunity to get in touch with a good auto loan provider and choose from a number of options.
Don’t rely on verbal promises. If they make an offer or say something important and notable, request that it be included in your contract before proceeding with the signature.
Don’t rush to sign the papers
When looking for a car loan, read the papers carefully to avoid any mistakes or ambiguities before signing with pen on paper. Ask for time to review the documents. If the paperwork is rejected and the paperwork must be completed immediately, a signal to leave is required. All who signed this document are bound, and being on the wrong side can cost a lot.
Don’t take conditional loans
Conditional loans are loans whose terms can change at any time. So while it may be good when you take it, things can end up getting worse when the change happens. A car is a necessary hassle, but you can get into big trouble before you even get one. Make sure all the details of the loan are secured first, without any modification terms. Details such as interest rate, payment term, and monthly repayment method must be signed and stamped before any commitment is made.
Calculate the interest rate yourself and make sure it suits you
For example, for salaried workers, monthly repayment schedules and interest rates do not bankrupt banks or interfere with other repayments. must be verified. cost. If this is verified properly and the loan is not doing well, let go of it and start looking for a better deal.
Conclusion
In summary, there are currently over 25 banks offering a variety of auto loans and programs, and the number is expected to increase through the end of 2019. Choosing the right bank and car loan package that’s right for you is important. As you go through car dealerships, at some point you may find that the car loans for those dealerships are tied to your bank. The average trader is trying to make a profit. However, there are car loans in Nigeria issued by industry experts who provide comprehensive insight and weigh options to find the one that fits your budget and lifestyle perfectly.
How to Apply for Auto Loan
As earlier said, getting a car loan is not rocket science. The major key to getting a car loan is to be qualified, and once you are qualified, you get the loan. So, what are the steps to being qualified to get a car loan in Nigeria?
First, you have to have a regular source of income. This means that every month a certain amount of money has to pass through your bank account to show that you can repay the loan back, as agreed. Whether you are an employee in a company or an Entrepreneur, you have to have the capacity to back the loan back. As an entrepreneur, you have to have the revenue to pay back the loan with the interest
Second, you have to present your bank statement to the auto-financing company. Some companies ask for six months to one year, and others ask for two years, it depends. The statement of account helps the lender know what your financial history is. If you have just been employed by a company a month before applying for a car loan, your chances of getting approved are slim.
The type of company you work for is also a huge factor in determining if you will get a loan or not. If you work for a known company or a multinational, then you have a higher chance of getting approved for a car loan in Nigeria.
After getting qualified there are some further steps involved after your financial status has been approved.
- Identify the type of car you want to buy. Before approaching an institution for a car loan you have to know the type of car you want to buy. Knowing the type of car you want to buy, gives you an estimated amount of money you need to loan, and even if you want to change the car choice, you have a range to work with.
- Auto-financing institutions usually don’t give 100% car financing, they provide at least 60% of the money and the remaining money is provided by the person borrowing it. Before getting the money from the institution, it is necessary to get a proforma invoice from the auto dealer. A proforma invoice is a draft invoice that shows that you have shown interest in the car and the car price.
You also need to have paid for car insurance, which is usually 5% of the value of the car. The insurance company has to be affiliated with the financing institution because banks don’t accept 3rd part insurance companies.
- After an invoice has been acquired and it has been approved, you get in touch with your account officer and present the documents to the officer.
- The account officer works with you to ensure that all needed documents have been submitted and approved.
- After all steps and documentation have been made, the money is disbursed to your account. The financial institution holds a spare car key to allow them to reclaim the car if the loan is not paid back in due time plus interest.
Auto-finance companies in Nigeria
There are several auto-finance companies in Nigeria. Many of them are independent institutions that are not affiliated with banks. Here are 10 auto-finance companies in Nigeria in no particular order.
- Royal Exchange Plc
- CreditVille Limited
- Credit Nigeria
- Rosabon Financial Services
- Access Bank Group
- First Bank of Nigeria Ltd
- AUTO LOAN | FCMB
- Vehicle and Asset Finance – Stanbic IBTC
- Opticom Finance Limited
- Citibank Nigeria
Frequently Asked Questions
Can I get a loan to purchase a used car?
Yes, car loans are offered for pre-used cars. But, the interest rate for such a loan would differ from that of a new car. However, the loan would only cover the price of the car itself, other costs such as transfer of registration, etc. will have to be borne by you.
Do I need collateral for a car loan?
Just as the name suggests, a car loan is a loan granted to an individual interested in buying a car. Therefore a car loan is a secured loan where the car you buy acts as collateral. Therefore, there is no additional collateral required for a car loan. However, you do have to get the RC (registration certificate) of the car endorsed by the bank. This endorsement is cancelled after repayment of the loan is completed.
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