A car financing loan is one of the easiest ways to buy a car when you do not have enough funds but urgently need one.
Car financing is the process of taking a loan so that you can buy a car. This loan is then repaid over time with interest and fees within a specified amount of time.
Different financial services providers have different requirements and processes, although they tend to have a convergence point since the intention is almost the same.
The following steps are necessary when looking for a car financing loan.
- Check your income
This will be the biggest factor in acquiring a car financing loan. Check if your salary or source of income is enough to service the loan so that you do not default on the loan, which will lead to loss of money and even the car.
2. Identify the financier
This is easily done by checking the interest rates offered by different lenders, periods of payments, ease of disbursement and other factors that could help or make it difficult for you to acquire a loan.
The interest rates will vary depending on the car you purchase, but you can use the car financing calculator, like for Mwananchi Credit, to determine them based on the various factors of the car type.
“Our loan amounts, therefore, can vary between a minimum of 150,000 KSH to 25,000,000 KSH. This all depends on the make, model, engine capacity, and manufacturing year of the car you want to buy. The repayment period can vary up to 24 months, during which you can pay in monthly installments, all the while owning the car you have brought. We offer financing on all forms of vehicles, which include matatus and lorries,” says Mwananchi Credit.
3. Approach the lender for the loan
Most lenders will not display the process of getting a car financing loan publicly, so you will have to approach them through the set channels, either physically or online.
Some, like Mwananchi Credit, will ask for documents such as a certified bank statement of six months, ID copy and IRA of the applicant, passport photos, proforma invoice and sale agreement.
4. Get the loan and buy the car
Most lenders might give you the loan within 24 hours while others extend it to 72 hours. Once you get the loan, purchase the car.
Note that the car, in most cases, is the security and cannot be sold until you clear the loan or the lender authorises the sale to clear the loan.