What if I tell you that you can get a loan specifically to buy that dream car of yours, would you go for it? There exist several genuine ways you can get a loan to buy a car and in this blog post, you will discover how to get car loan in Nigeria.
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How To Get A Car Loan In Nigeria
What is a Car loan?
A Car loan is a type of car financing that allows an individual to borrow money from a lender to purchase a car.
What to do before getting a Car loan
Getting a car loan in Nigeria comes with certain requirements which you should indeed research and consider if it is what you want to do.
Before getting a car loan you should consider;
The Cost of the Car and the Repayment terms
Monthly repayments of a car loan in Nigeria are mostly done in installments. Repayment terms could be 60- 72 months or more. It varies with the car lending institution. Still, you should know that the longer the repayment term, the lower the monthly payments and the higher the possibility of paying a higher total interest rate. So choose your loan repayment term carefully.
The interest rate associated with the car loan and associated charges.
Many car loan financing institutions pay the full cost of the car amount while some do not. Most will require you to make an upfront payment towards the cost of the car while some will pay 60% of the total car amount and you will be made to pay 40%. Some car loans require you to pay a certain amount of money (APR) as part of the car loan. Considering the interest rates and fees will help you choose a car loan financing option that is suited for you.
Consider if the car loan has mileage limits
If you are getting your car loan by dealership financing, you might be restricted on miles driven by the car dealer. This is one of the things you should look out for.
Most importantly before getting a car loan in Nigeria please ensure that you have a steady flow of income. Believe me, many car lenders in Nigeria do not treat defaulters kindly. Some only add a default fee while some go to the extent of reclaiming the car(car loan by a dealership or some banks).
Requirements Needed to get a Car Loan in Nigeria
There is always a requirement needed before one it’s eligible to apply for a loan. Listed below are the basic requirements needed to get qualified for a car loan in Nigeria but please note, requirements vary with the lending institution
- Individuals applying for loan must be 18 years or above
- Applicants must have a regular source of income (paid employment or entrepreneurship)
- Must provide a bank statement. Bank statements can range from 6 months to 2 years depending on the financial company etc.,
Easy steps on how to get a car loan in Nigeria
- After identifying the type of car you want to buy, calculate the cost and estimate the loan amount that would cover it.
- Apply for a car loan in a financial company that suits your choice and apply (online or offline)
- Get the 40% of the car amount and pay for car insurance. This depends on the financial institution you are borrowing the money from
- Acquire a proforma invoice( draft invoice showing your interest in the car and the car price)and get it approved by the car dealership.
- Present the approved invoice and other required documents to your lender
- Then, wait patiently for your car loan application to be processed. If your loan is approved, money will be disbursed to you immediately or the car will be leased to you.
Ways you can get a Car Loan in Nigeria
You can get a loan to buy a car in Nigeria through the following ways
Private lenders
This refers to digital lending platforms like Fairmoney, Quick cash, Branch, Palmcredit, Carbon, etc. Private lenders are the most common way you can get a car loan in Nigeria but you would have to improve your credit history before you would be given access to a higher amount that would cover the cost of getting a car.
Direct lending from banks and credit unions
There are a large number of banks in Nigeria that offers car loans to salary earners through their auto lease programs. A few of the best banks and credit companies you can get financing to buy a car are; Stanbic IBTC through its vehicle asset finance, Access bank, First Bank, UBA Auto loan, FCMB, Autochek, CreditVille limited, Opticom Finance, StartCredit, and Rosabon Financial Services.
Dealership Financing
Dealership financing is one of the convenient ways you can get a car in Nigeria. All you have to do is apply and obtain the loan from a car dealer finance department. If the loan is approved you can pick a car of your choice from available car options.
Final Thoughts
Everyone wants to own a car but many tell themselves they can not afford it. Money should not be a limiting factor to getting that life of luxury you dream of having. Just like in America it is indeed possible to get a car loan in Nigeria but you must be abreast of how the car loan process works to be better prepared and also ensure that you can repay the loan when due.