Step 2: Find out the price of the car and when it will be delivered to you once you pay. All you need to do is to go to a car shop/dealer and identify the car you wish to buy and get a proforma invoice. A proforma invoice is basically a draft invoice. It is none binding on you or on the seller of the car. Banks typically finance 60 per cent of the value of the car, meaning you will have to come up with the balance of 40 per cent. You will also need to provide funds for the insurance of the car. It is usually five per cent of the value of the car.
Step 3: Find out if the car dealer already has an arrangement with your bank. Some banks have arrangements with car dealers, which also aid processing of the loan. If the dealer does not, approach the bank anyway.
Step 4: Banks offer several products that outline their terms for a car loan. However, the details are mostly the same. The difference probably lies in the processes and speed at which your loan will be processed. Go for the banks that offer fewer requirements and disburse faster.
Step 5: Assuming your bank does, get in touch with your account officer and request that you need a car loan. If you want to approach another bank then just identify the bank and approach their customer service desk for direction. But bear in mind that you may have to open an account with them.
Step 6: Now that you have met with the bank, you will be asked to draft a formal application letter for a car loan. Once you are done with the letter attach a copy of your payslip, the invoice for the car and a copy of your employment letter. Give them to your account officer for processing
Step 7: The bank through the account officer will present you with a set of forms to fill which will include things like your personal details, salary, address, bank address, etc. They are mostly routine and should be easy to fill.
Step 8: Once that is done, the bank will present you with an offer letter. The offer letter from the bank is a document showing the amount lent to you by the bank, the interest rate, repayment structure, fees, security, etc. Make sure to request for an amortization schedule. Amortization schedule is a break-down of the likely payments you will be making to the bank throughout the duration of the loan. It helps you plan and to avoid default.
Step 9: Once you accept the offer and fulfill all requirements of the bank, the loan will be disbursed. Your account will now be debited with the full purchase price of the car along with the insurance premium.
Step 10: The Insurance company will typically be chosen by the bank which will also process all vehicle registration and licensing. As expected, the ownership of the car will be shared between you and the bank. The bank will keep a set of the keys as well. The car is now yours and you can now drive it home. Banks do not usually ask for a collateral apart from the comprehensive insurance, a set-off over any cash in your bank accounts and the car itself. So when you default in payments, the bank can seize the car from you and sell it recover its money.
Note: This is just a guide and does not guarantee that you will get the loan if you follow the steps above.
IMOH, Patrick E.
+234 803 616 2613
+234 802 846 3657
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