Having a personal car in Nigeria can make your life good, comfortable and enjoyable. With a car you can comfortably drive to work or any place instead of trekking or using public transport that most time congest with full load of passengers. However, if you don’t have enough money to buy a car, you don’t need worry yourself because I’m here to show you how to get car loans in Nigeria without stress.
In this article, I’ll focuse on how to obtain a car loan and every other thing you may need to know about car loans.
The truth is that most people you see driving a car today purchased their cars through ‘car loans’. Buying a car nowadays is easy unlike those days when one would have to save huge amount of money, and take to car vendors.
Who can get a car loan?
Not anybody actually, you need to meet certain requirements before a bank will give you a car loan. Although, it doesn’t require complicated work.
Banks in Nigeria usually give car loans to those who have regular or stable income. Meaning that you need to have a stable income from your business or work to obtain car loan. Those who work with reputable or well-known companies have better chances of getting car loan from any bank.
SEE ALSO: How to access CBN loan for businesses
How to prove you have stable income
When sourcing for a car loan from banks, it is quite simple to prove to them that you have a stable source of income. All you need is to show them your official bank statement for a period not less than 2 years. If you are self-employed, you can still get car loan as long as you can prove that you have regular income for a period of 2 years.
Note: if you don’t work with any reputable company or if you don’t have steady income, that does not mean that you won’t get a car loan in Nigeria. What you need is to put more effort into it.
Eligibility for a car loan
To determine your eligibility status for car loan, banks would consider the following; age, salary, job type and residence.
What documents are required for car loan?
You must produce the following documents;
- Identity proof: Such as; International Passport, National ID Card, Driving licence, Partment Voters’ card etc.
Address proof: Such as; voters’ card, utilities bill etc.
Age proof: Such as; Birth Certificate, Baptismal card, Affidavit etc.
Income proof: Such as; 2 – 3 months bank statement, latest income, tax return etc.
How to get car loans in Nigeria
Below are step by step procedures to get a car loan in Nigeria:
- Know the car you want: The first thing to do is to be sure of the type of car and brand you want to buy. Banks are always ready to give you a car loan but they would like to know exactly the car you want to buy because they don’t offer loans for some brands or tokunbo (2nd hand cars).
Know the price of the car: It is also important to know the price or cost of the car. Sincerely speaking, no bank in Nigeria that will give you 100% of the car price. They normally give 60 – 80% of the price while you pay the remaining balance. Also, it is your responsibility to pay for the insurance cost which may be up to 5% of the car price.
Choose a Bank: The next is to find a bank that will give you the best car loan in Nigeria. Although, the variety of banks in Nigeria offer something similar but you’ll definitely prefer one bank to another. You are not bound to take car loan from the bank where you have an account. If another bank gives you a better deal, then feel free to take you car loan from them. There are some car dealers that already made agreement with some banks. If you can find those dealers, then it would make the whole process very easy for you, this is because the dealer and the bank will process the loan only for you to come and sign their documents, and pay the remaining balance.
Follow the formal process: After you have chosen a bank, the next is to go to the bank and begin the process. You will be asked to write official letter in line with existing format. Attach a copy of payslip, car invoice, bank statement and paper that confirm the nature of your job. You will also be asked to fill some forms which is quite easy.
You will receive a document that you will sign from the bank which contain details of your car loan such as; amount, interest rate etc
After all these, the loan will be given to you, you will get a draft which gives you the right to purchase and own the car.
The dealer will release the car to you, and the car will be yours though half of the car is owned by the bank pending the time you will clear the loan.
Import things to know about car loans in Nigeria
There is something called ‘Hypothecation’. If you buy a car through loan in Nigeria, the lender of the loan has right to seize your car if you do not pay EMI on time.
You will be made to sign the hypothecation letter when you process a car loan.
If you don’t pay for several months, the bank can expropriate your car and sell it in order to return the money.
Once you clear all your EMIs, just make sure you change the owner’s name on the papers.
Car loans are usually given for a period of 4 years. Within this duration, you are expected to pay specific amount as part of the loan and interest every month. The interest rate, in most cases, fluctuate with the market price.
As you have seen, getting a car loan in Nigeria is not difficult. If you follow the instructions given above, you will be moving with your new brand car. Do not forget that it is also important to pay the part of the money monthly until you off-set the loan.