This article will help you on how to apply for a car loan in Nigeria so you can get approved on any car loan company.
Do you want to get a car loan in Nigeria and you do not know how to go about it? Relax, take a seat. These stages have been broken down into easy-to-understand steps. Contrary to popular belief, car loans can be obtained very easily if you have the right knowledge.
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How do you apply for a car loan in Nigeria?
Follow these steps to get a car loan in Nigeria.
Identify Type Of Car
You should identify the type of car that you want to purchase. The banks will finance any car, no matter how old or new. This is an important step, as you don’t want to approach a bank without knowing what you want. This way you will have a guide to help you make a decision, even if it is not the right one.
Once you have paid, find out the cost and when the car will be delivered. It’s very simple. You just need to go to a shop and identify which car you want. After this, you will be able to get a proforma bill – a draft of your invoice.
Notably, banks don’t usually finance your entire car purchase. Banks typically finance 60% to 70% of the purchase, while equity (or your own money) funds the rest. For example, if the car is worth N2 million, 60% will be paid by the bank, which is N1.2m, while the remaining N800K will go to you. You will also be required to purchase car insurance, which covers 5% of the car’s value. According to our calculations, this amounts to N100k.
Consult Your Dealer
Check to see if your dealer is already a member of your bank. To facilitate the loan process, some banks will make arrangements with dealers in advance.
Pick The Best Car Loan With Your Bank
There are many products offered by banks that describe the terms of a car loan. However, the details may vary. The best thing for you is to use a bank that offers car loan products. You can choose to continue with your bank or find another one if they don’t offer it. Almost all banks offer these products.
If your bank has such offers, get in touch with them to request a car loan. You can also contact customer service at another bank if you prefer. You would need to open an account at such bank.
Submit A Formal Request
Once you have gotten everything resolved with your bank, it will be time to submit a formal request for a car loan. Attach a copy your payslip, [final] invoice and a letter from your employer. These details will be required by your account officer for processing.
Wait For Approval
Once you have submitted your application, it is now time to wait for processing. You will be presented with two forms by the bank through your account officer. These forms could contain information such as your personal details, salary details and residential address.
Bank Will Reply With An Offer Letter
The bank will then send you an offer letter. The bank will send you an offer letter. This document contains information such as the amount of the loan, the interest rate, repayment structure and fees. They may also require standing orders. These are an order you give to your bank to take your monthly salary.
You should check your bank statement every month at the end to see how much was deducted from your account. If there is a greater than 10% difference in any month (e.g. your repayment schedule states N80k, but suddenly you see N88k), your account officer should be contacted immediately.
After you accept the bank’s offer and meet all requirements, the loan will be credited to your account. The bank will not disburse the loan to you until they issue a bank draft for the dealer to purchase the car.
Receive Draft From Bank And Enjoy Your Dream Car
After you receive the draft from the bank, you will be able to get the car. The bank and you will share ownership of the car. All car documents will include your name and that of the bank. Banks rarely require collateral. The comprehensive insurance you pay for as well as the car itself is their security. If you fail to pay your payments, the bank may seize the car and then sell it to cover the loss.
Mr Olawale Olokede is a registered loan officer and worked for over 10 years as a senior financial consultant for accounting, finance and business management firms in Nigeria. Mr Olawale Olokede implemented and supervised financial and loan solution to Lagos based small and medium scale businesses after lecturing at the Lagos Business school. He is channeled his writing skills and passion for blogging to set up Lending Naija with over 50 reviews on different loan application and downloads.