Ever Wondered How to Get a Car Loan in Nigeria? Here is How.

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Getting a new car doesn’t have to be an arduous task. Gone were the day when it’s reserved only for the privileged. You too can own a car, right NOW! Some people are taking 10 years of their life to prepare for their first car. That’s uncalled for. It doesn’t have to be so. A car is a basic necessity that you and I are entitled to.

Financial institutions here in Nigeria are now offering car loans to individuals and businesses. It’s a  credit facilities to part/full finance the purchase of brand new vehicles for personal use by staff of private and public sector organizations whose salaries and allowances are domiciled with them. Some of the banks call it auto loan or financing when its one to nine vehicles and fleet financing when it’s from ten and above.

List of banks that offers auto financing

Access Bank Plc.
First Bank of Nigeria Ltd
Stanbic IBTC Bank
Skye Bank Plc.
Diamond Banks Plc.
Guaranty Trust Bank Plc. etc.

Who is entitled?

Salary Earners

This is a basic requirement for accessing a car financing. Some banks only grant salary earners and in some cases, a specified bracket of salary earners.

Self-Employed/Affluent Entrepreneurs

These are business persons. Some banks offers car financing to them at a specified turnover capacity. Your business should be registered with CAC (Corporate Affairs Commission), with all valid documentation.

Type of Car

Most banks only finance brand new new cars. Some banks don’t finance certain brands and tokunbo/second-hand vehicles.

Worth of Car

Commercial banks do have limits on vehicle financing. They often finance from N1million and above to a limit of N100,000 or more. Different banks have their specification on this.

Equity Participation

You are most likely not going to get a 100% financing from a Nigeria bank. They usually demand certain percentage from the customer as owner’ contribution. GT Bank requires 20%, Access Bank demands 10% for vehicle financing etc.

Salary Domiciliation

Except for very few banks,  they generally demand your salary or business account must be domiciled in the bank. In some cases, you can migrate your account to the bank. As in the case of Access Bank Plc, your salary must be up to N80,000(eighty thousand naira) and above.

Accompanying Documents

You will need to supply certain additional documents to the bank while processing the loan. Some of which are:
  1. Application Letter
  2. Duly Completed Auto Loan application form
  3. Proforma Invoice from the bank’ list of approved dealers.
  4. Current 3months of more pay slip
  5. Statement OF Account
  6. Letter of total emolument
  7. Other KYC(Know Your Customer) requirements(if applicable) etc.

Loan Process

The loan process in most banks are as follows:
  1. Obtain a proforma invoice from an approved dealer of the bank for the car you want.
  2. Duly fill an application form in any branch of the bank.
  3. Await the bank decision. They will conduct due diligence on you and your company, if they find you credit-worthy, they will approve or disapprove you of the loan if they don’t.
  4. If your application id successful, the bank will credit the auto dealership account and the dealer will send the car to bank for your collection.

Follow up on your bank with these information, make real your dream of a brand new car this year. It’s your right.

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