Get a car loan in Nigeria with ease! Compare top lenders, interest rates, and repayment plans to finance your dream car today.
I still remember how I felt after I was able to secure my first car fully financed through a car loan. The experience wasn’t easy at all, but it was 100% worth every effort. Comparing interest rates and having to understand repayment terms were some of the critical steps to note
Owning a car in Nigeria has indeed gone beyond being a rich man’s doing; it’s now a facility needed to tackle the hustle and bustle of everyday living. True, it makes a significant difference in your life; you will experience freedom from the stress of dealing with public transport and convenience for work or a family.
Not even the fact that cars are expensive! A lot of Nigerians now turn to vehicle loans, thanks to prices going up every day. Well, worry not; this guide will take you through everything you need to know about car loans in Nigeria, from how they work to which lenders are the best, from application steps, interest rates, and smart tips for repayment so as to keep you on track.
Table of Contents
What is a Car Loan?
A car loan is a form of lending from a lender, usually a bank or financing company, for purchasing a car. The borrower pays back the loan amount over a period agreed to, usually in monthly installments, as well as interest. This type of loan can be secured by collateral or tied directly to the car as security.
Benefits of Car Loans in Nigeria
A few of the benefits of car loan in Nigeria include:
- Immediate Access to Vehicles: There are no initial savings to be made by you for acquiring your dream vehicle..
- Flexible Repayment Plans: Most lenders give repayment tenure on installment plans for your convenience and range from one year to five years, making loans including household loans easier to manage.
- Improved Creditworthiness: Successfully repaying a car loan can enhance your credit score, making it easier to secure future loans.
8 Top Providers of Car Loans in Nigeria
The following is a list of some of the highly renowned institutions that offer car loans in Nigeria:
Access Bank Vehicle Loan
Access Bank provides car loans for individuals and businesses.
How to Apply:
- Visit any access bank branch. Please go to the customer care.
- Submit a completed loan application form.
- Attach relevant supporting documents, such as proof of income, a valid ID, a vehicle proforma invoice, and an employment letter(for salaried individuals).
- Upon approval, you can enjoy repayment terms of up to 48 months at competitive interest rates.
First Bank Auto Loan
Auto loans from First Bank are equipped with all the flexible financing required for buying new vehicles and purchasing second-hand vehicles.
How to Apply:
- Request for a vehicle proforma invoice from an accredited dealer. Fill a loan application form online or at the bank.
- Documents required are valid ID, income statement, proof of employment or proof of business registration by the applicant.
- One of the major features of First Bank Auto Loan is that it finances 80% of the car’s value approved and offers repayment terms ranging from 12-60 months.
Stanbic IBTC Vehicle and Asset Finance (VAF)
Stanbic IBTC is an institution that is known to provide easy ways of acquiring vehicles with very simple processes and favorable terms.
How to Apply:
- Visit Stanbic IBTC’s website or any branch and complete a loan application form.
- Attach documents such as income proof, ID, and a proforma invoice for your vehicle.
- The bank checks your creditworthiness and then swiftly processes the loan.
- Flexible repayment plans that suit your financial plan are available.
CreditVille Auto Loans
CreditVille is very popular for developing a high-speed loan application process designed for people with a consistent and guaranteed income.
How to Apply:
- Applying is simple and can be done online on their platform, making it a great option for those seeking an online loan in Nigeria.
- Click here to visit the website.
- Submit your proof of income, valid ID, and vehicle details.
- You automatically wait for loan approval, which is usually quite fast.
- You then start paying in easy monthly installments while you drive your car.
BetaCar Financing
The benefit of BetaCar is that it has focused on used cars and added insurance benefits.
How to Apply:
- Register online on their website and select a car from authorized dealers.
- Present to them documents such as ID, proof of income, and residency.
- BetaCar reviews your application and disburses funds down to the dealer if approved.
- Enjoy their repayment terms made for used cars.
Rosabon Financial Services
It is a more favorable choice if you need quick approvals and flexibility with repayment terms.
How to Apply:
- Please apply online to complete the application form and submit it.
- Submit documents such as ID, proof of income, and business registration (for SMEs).
- Choose among various repayment plans like monthly and quarterly once approved.
Polaris Bank Auto Loan
Polaris Bank offers loans for new vehicles with flexible terms.
How to Apply:
- Visit the Polaris Bank branch and fill out the loan form.
- ID, proof of income, and vehicle proforma invoice must be appended to the loan application.
- Once the loan is approved, Polaris Bank finances the vehicle, and the customer repays within 48 months while enjoying competitive rates.
GTBank Auto Loan
GTBank’s auto loan product caters to individuals looking for brand-new or pre-owned cars. Learn more about how to get a loan from GTBank to finance your car.
How to Apply:
- Walk into the bank or Apply here at the GT Bank website.
- Visit the customer center for detailed processing.
- Complete an application form, valid ID, proforma invoice, and proof of income, and submit the documents.
- The dealer will receive the loan amount directly after the approval of your loan application. And you can start paying back now.
Requirements for Applying for a Car Loan in Nigeria
There are some eligibility conditions you will have to meet before you can apply for a car loan:
- Regular proof of income (salary slips, business revenue, or other verifiable sources)
- At least six months of bank statements
- Proforma invoice from the car dealer
- Valid means of identification (National ID, Passport, Driver’s License, or Voter’s Card)
- Evidence of employment or business registration for self-employed
- Proof of address, like a utility bill
- Upfront payment, generally between 20 to 40 percent of the car price.
How To Apply for a Car Loan in Nigeria
- Research and Compare Lenders: Visit banks and financing companies listed above to find out about the different requirements for car loans. Compare interest rates, loan tenures, and processing fees.
- Select Your Vehicle: Select the vehicle you intend to buy and obtain a proforma invoice from the dealer.
- Prepare Your Documents: Keeping aside the proof of income, identification, and bank statements, prepare all other papers required.
- Submit Your Application: Visit your chosen lender ( any one of the aforementioned lenders) and fill up the application form. Attach all the papers required and submit them for processing.
- Loan Approval and Disbursement: After approval, the amount of the loan granted will be sent to the dealer of the vehicle directly. It would help if you also met any other conditions, like getting insurance for the vehicle.
Key Factors to Consider Before Taking a Car Loan
Interest Rate: Compare the interest rates offered by different lenders to prevent incurring an excess of cost on the loan.
Repayment Term: Select a repayment term that agrees with your income per month; longer terms will yield lower monthly payments, while shorter terms will pay less interest overall.
Amount of Loan and Down Payment: Ensure that payment of the requisite deposit is comfortable with you since it is usually 20%-40% of the car cost.
Hidden Costs: Keep an eye open for things like processing fees, charges for repayment in advance and insurance costs, which can push up the total cost of the loan.
Consequences of Default: Do know and understand what late payments or loan default is going to do to you financially.
Which loan is best for buying a car?
The best loan depends on your financial capacity and preferences. Banks like Access Bank, First Bank, and Stanbic IBTC offer competitive rates.
Can I buy a car on credit in Nigeria?
Yes, many banks, financing companies, and car dealerships provide credit options for purchasing vehicles.
Which company is best for a car loan?
Stanbic IBTC, CreditVille, and BetaCar are popular for offering reliable car loan services.
What is the interest rate for vehicle finance?
Interest rates vary but typically range from 10% to 25% per annum, depending on the lender and loan terms.
How much is the deposit for a car loan?
Most lenders require a down payment of 20% to 40% of the car’s total price.
What is the repayment period for car loans?
Repayment periods range from 12 months to 60 months, depending on the loan provider and your agreement.
Can I get a loan for a used car?
Yes, many institutions, including BetaCar and Rosabon Financial Services, provide financing options for used cars.
Which bank offers the lowest interest rate on car loans?
Banks like Stanbic IBTC and Access Bank are known for offering competitive rates on car loans.
Do I need insurance for a car loan?
Yes, most lenders require comprehensive insurance on the car as a condition for the loan.
What happens if I default on a car loan?
Defaulting on a car loan can lead to penalties, damage to your credit score, or repossession of the vehicle.