Whether it’s your first car or you want to upgrade to a higher model, getting a car with little or no money in Nigeria is not impossible.
Owning an automobile is a necessity, but due to low income and other factors, some individuals find it difficult to get a car.
But there’s a way out. As stated, with little or no money, Auto Finance Companies have come up with loan schemes in Nigeria that help people own their dream car.
Requirements for getting a car loan in Nigeria
As an individual looking to purchase a car without breaking the bank, you need to do your homework to ensure that your car loan application is not turned down.
Bringing the appropriate documents could help you to get a car loan more quickly when it’s time to apply. Generally, lenders are looking for proof that you are a good credit risk and will be able to repay the loan.
This information, along with your credit report and score, will factor into the interest rate you are offered.
Below is a checklist of what you need for a car loan which can vary between finance houses.
Proof Of Identity
Lenders are required by law to confirm customers’ identification. In most cases, a driver’s license, International passport, or other government-issued I.D would suffice.
In some circumstances, lenders are able to verify your identity without documentation. In these instances, the lender may contact third-party sources like your employer
If you are taking out an auto loan as a business, you’ll need to use your Employee Identification.
Proof of Income
Lenders want to determine that you have the ability to repay your auto loan before they finance a car. Lenders assess your income, assets, employment, credit history, and monthly expenses to determine whether you’re able to pay back the loan.
For a self-employed looking for a car loan in Nigeria, lenders often use tax returns to determine gross income. Showing proof of additional sources of income or other assets may help you to qualify for a larger loan or improve the terms of your loan.
Credit And Banking History
When you apply for a car loan, you’ll need to provide lenders with some personal information including your home address, office address, date of birth, and other requirements so they can pull your credit.
Auto lenders may utilize different credit scoring systems, including FICO auto scores. Some may even ask for your Bank Verification Number (BVN).
They also may review your credit history, including the type of credit accounts you have, when you opened them, the credit limit or loan amount, your account balance, and payment history.
Proof of Residence
Existing laws require lenders to gather information on your residence, as well as proof of that residence.
If your driver’s license is current or the address you provided on the credit application matches the address on your credit report, this may be sufficient for most lenders.
If you recently moved, you may need to provide further documentation. You may be able to use a piece of personalized mail you have received within the last month such as a utility bill, rent agreements, bank statements, and others.
If you’re financing through a dealership, the dealer will provide all the vehicle information to the lender.
If you are working with a lender directly or buying a car from a private seller, you will need to obtain or complete a bill of sale, purchase agreement, or buyer’s order, which should include: Purchase price, Vehicle identification number (VIN), year, make and model.
If you’re buying a used car, get the above information from the seller, along with the car’s mileage, original title, and disclosure of any liens on the car.
How does a car loan in Nigeria work?
A car loan is paid back to the lender in monthly installments called loan payments. Your monthly payment will depend on the amount of the loan, the loan term, and the amount of interest you’ll have to pay over the course of the loan.
Longer-term loans, like 60-month or 72-month loans, can make your monthly payment lower. However, with a longer loan term, you could end up paying more over the life of the loan when you add up the interest.
Get a car with little or no money
Applying for a car loan in Nigeria is not as complicated as it may seem. Even though car loans are getting increasingly difficult to obtain in Nigeria, the process is seamless once you are eligible.
First, you need to identify the car you intend to buy and how much it cost. Some loan companies in Nigeria already have car loan options available and also have an arrangement with car dealers. It makes the process easier.
Next, find out how and when it will be delivered after you’ve successfully paid for it. Remember, you need to make a down payment while the financial institution finances the rest of the purchase which is around 60% or 70% of it.
Some of the factors taken into consideration before going into such a partnership include;
- Your monthly income
- The consistent inflow of funds
Your loan tenure is next. The loan tenure is the duration which the car loan will run for. Most car loans run for a term of four to five years.
Things to consider before taking a car loan
After you have observed all your options, consider the following factors before you proceed with the car loan.
- Interest rates of the car loan
- The affordability of the monthly payments
- Upfront deposit required
Where can I get a car loan in Nigeria?
Whether you are buying a new or a used car, there are few banks and institutions that offer car loans and other car financing options in Nigeria.
Some of them are listed below.
Wema Bank Easy Buy
Wema Bank Easy Buy Finance scheme affords its customers an opportunity to apply for CIG Motors Car Loan by following easy and simple steps.
The car Loan enables you to own a car today for as low as ₦195,000 monthly payment!
Through the Easy Buy Finance scheme, loan seekers can buy GAC vehicles with ease and at affordable prices with a flexible repayment plan.
This facility is customized for its salary savings or current account customers to buy motor vehicles.
The scheme enables individuals who meet the prescribed conditions to pay an equity contribution of 10% with 48 monthly tenor payment
Betacar Financing gives salary earners and registered business owners in Nigeria the opportunity to buy quality certified used cars and pay over a period of 12-24 months.
To qualify, search available cars to select your preferred car on the Betcar website. Use the simple car loan calculator to check the upfront deposit required, the monthly repayment, and the period of payment.
Click on the ‘Apply for Loan’ button and fill out the pre-approval assessment form.
You will get an approval or rejection email within 10 minutes.
If approved, you will get an email listing the documents needed, so start preparing all your documents.
FCMB Auto Loan
FCMB is another bank that offers Nigerians the opportunity to own their dream car and conveniently spread the payments over a period
This is a consumer credit scheme that allows qualified individuals to part-finance the acquisition of cars for personal use. Customers can own a car and pay over a period of time.
It enables customers to purchase vehicles from auto dealers who have been prequalified and have an agreement with the bank
Access Bank AutoClub
AutoClub by Access Bank is designed to meet all the automobile needs of Nigerians by providing pre-owned and brand-new vehicle purchase financing.
AutoClub provides financing at very competitive interest rates, with a discount on motor insurance.
It also provides access to exclusive auto services from vehicle purchase, maintenance, usage to disposal, and so much more
AutoClub is open to salaried income persons, SMEs and Corporate individuals as equity contribution could be as low as 10% of the invoice value
Cars45 Car Financing
The Cars45 Car Financing is designed for all those who earn a steady income and want to acquire a vehicle via a flexible repayment plan.
This initiative provides convenience and prevents you from breaking the bank to get that car.
Cars45 works closely with financial service providers who finance the cars.