Buying a car on loan in Nigeria has become one of the easiest ways of owning a new vehicle. It has become a popular route for people who do not have the complete money to buy a car by paying cash. With the present economic situation in the country, saving up for a car can be very hard for most people and they may end up not realising their dreams of having a car to call their own. This explains the reason why a large number of salary earners now hunt for ways to obtain a car loan in Nigeria.
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It does not matter whether you are looking to get a car loan for your Uber business or you just want to get a personal car for yourself, this article has all the information you need.
How do car loans work in Nigeria?
Individuals and cooperate bodies do not have to wait anymore till their money is complete before acquiring a new car in Nigeria. That is the truth and you can now own a new car while paying in instalments over a period of time. It should be however noted that not everyone who is looking for a car loan is eligible. A lot of car financing companies usually have laid down policies and rules that must be followed.
How to get a car loan in Nigeria
Getting a car loan in Nigeria or just about any other country is way easier than you might think. It does not matter whether you want to go into the transportation business or you need a car to ease transportation issues. There are steps required to get a car loan in Nigeria in 2021. For instance, you are expected to have a minimum monthly income that ranges from N150,000 to N250,000. If you meet this first requirement, you automatically qualify for a car loan.
Where to get Car Loans
Banks that offer car loans
Some financial institutions in Nigeria have created easy ways for customers to have their own car, even when they do not have the financial means. Nigerian banks such as Stanbic IBTC, UBA, FCMB, and Access bank have set up schemes to enable individuals to get vehicle financing in Nigeria.
Access bank provides customers with a user-friendly car loan feature that will help them acquire a new or used car in an easy way. The loan is only open to salary account holders, small-medium enterprises (SMEs), and corporate bodies. Access bank is in collaboration with various car dealers in Nigeria to give customers more options to choose from a wide array of auto brands. Not long ago, the bank partnered with Hyundai Motors Nigeria to launch a new car purchase scheme titled “Buy Now, Pay Later”. This payment plan allows customers to start paying in 3 months’ time. They are to pay 200,000 monthly for a period of 4 years.
FCMB auto loan
FCMB runs a customer credit scheme where qualified individuals are allowed to make a part payment for car acquisition. This scheme allows customers to get up to N30 million car loan and pay during a stipulated time frame which is 3 years. The interest rate is 20% per annum.
UBA auto loan
Just like other Banks offering car loan services, the UBA auto loan product allows customers to drive their first car and repay at their own convenience. Not only that, but customers also have the opportunity to upgrade to a higher model. Auto brands approved for this car loan include Hyundai, Mercedes-Benz, Nissan, Kia, Volkswagen, Suzuki, and Ford.
Car loan companies
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
Steps to getting good car loan deals
These are the steps needed to get good car loan deals in Nigeria:
- Shop for the loan separately from the car: Before you even start negotiating on the exact car and price, begin the loan application process with various banks in order to get the best possible options. You can get prequalification for a loan, which will enable you to go to the dealer with a blank cheque. Once you have a solid, written contract with the dealer that is when you can now ask if they can beat the financing deal you already have.
- Limit your loan shopping period: It is important to make sure you do not elongate your loan shopping period too long. Loan conditions change from time to time. Make sure you conclude the process within one or two months. Abroad, every time you apply for a loan, whether you are approved, or whether you use it, your credit score goes down and it makes it slightly more difficult to get a prime-rate loan. But if you make all of your applications within a two-week period, they count as only one inquiry.
- Do not assume the best will happen: Lenders are not obligated to offer you the best rate for which you qualify. There are over 20 banks in the country. Look at the various car loan schemes and the interest rates they offer before concluding.
- Read the paperwork: Take the loan paperwork home and read it before you sign anything. This is a binding agreement that is going to last for years, so you need to know exactly what is in it before signing. There are some points that warrant special caution. You need to figure out the highest possible payment. If you cannot afford it, the loan is not for you.
- Avoid conditional financing: Never take a car loan unless the financing which are the down payment amount, interest rate, length of the loan, and monthly payments is finalised. If the financing is going to be conditional, that means they can change later and you can get stuck with less advantageous terms.