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Cars are essential for movement in Nigeria. If you’re reading this, chances are that you’re looking to buy a car. Although you need a car now, but you can’t afford it?
Do you know that there are lenders who can give you money to buy that car now?
These lenders are plenty, with each offering their own unique advantages and disadvantages. You definitely do not have the time to sort through and compare them all.
This is where Credit Nigeria comes in.
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Compare Loan Offers Instantly with Any Device
Get a loan through Credit Nigeria with 3 simple steps.
Fill in the loan form
Complete and submit our short loan comparison application and we will provide you with eligible loan offers.
Choose a loan offer
Select the loan offer that best fits your requirements from the list of eligible loan offers
Get the money
Finalise your application with the chosen lender and get the loan disbursed to your account.
What is a car loan
A car loan is a kind of loan you take to buy a new or used car, also known as a ‘Tokunbo’ car.
The important thing to note with car loans is that the purchased car is the collateral.
Think of it as borrowing money to buy a car, but the lender owns the vehicle until you pay back the money you borrowed. If you don’t pay all the money you owe in the specified period, the lenders seize the car; it’s that simple.
Another option is to take a collateral-free car loan, where your car or any other asset is not used as collateral. Although there are advantages to a collateral-free car loan, the disadvantage is that the interest rate is usually higher.
The interest you agree to pay is where the lenders profit from borrowing you money for the car.
What to consider before choosing a car loan
Car loans, which are also called Automobile loans, vehicle loans or Auto-Loans, can be tricky to understand when it comes to interest rates.
You can end up with a poor car loan choice if you do not understand the terms used in the industry.
Credit Nigeria will help you understand important details. This will help you select the best loan offer for you.
Interest rates to expect on car loans depend on several factors.
It is important to understand these factors before applying for a car loan:
- Down Payment
- Annual Percentage Rate (APR)
- Monthly payment during the loan term
Down Payment is usually a portion of the car price that you need to supply yourself. With a car loan, where the car is used as collateral, the lender usually only loans a portion of the total price.
The larger your down payment, the less loan you need and the less you need to pay in interest rate.
On some occasions, you can trade in an old vehicle alongside the down payment to lessen the loan amount required.
The annual percentage rate is one of the most important factors to consider because it is vital to understand how much interest you will have to pay during the loan term.
Most car lenders tell you to pay less money back monthly, which increases your loan term. This way, you end up paying more interest in the long run. As a rule of thumb, it is usually cheaper to pay back the loan quickly.
As a vivid example, you take a ₦1,000,000 car loan at a 2.00% APR in a 4-year term. Over 48 months, you’ll pay approximately #40,000 Naira in interest on the loan.
If you now decide to pay back the same loan over a period of six years with the same APR, you will be paying less back monthly, but the interest you’ll pay at the end of the day will now be approximately ₦60,000 for the same loan amount.
How Credit Nigeria Works
Credit Nigeria is a modern online loan comparison platform that provides a safe and easy way to find loan offers you are eligible for, compare loan offers and select the loan offer to your liking.
After completing the loan comparison form, you will get a list of loan offers you are eligible for within seconds.
It's that fast, simple and all online.
Interest rates to expect for a car loan
Interest rates on car loans range from 17% to 30% per year in Nigeria for banks. These high interest rates result from many factors that cannot be avoided due to the current state of things in Nigeria.
Reasons to get a car loan
You can get a car loan if you need a car and you have a steady source of income.
This source of income should allow you to pay back monthly for the entire loan term.
Even if you already have a car, but you want to upgrade, you can take a car loan. Car loans are the best types of loans to take to buy a new car.
Car loans use the car you’re buying as collateral till you’re able to pay the lenders back with the agreed interest.
The presence of the car as collateral offers you a lower interest rate as compared to other loan types.
How to get the best car loan in Nigeria
You can spend days researching how to get the best car loan, or you can use Credit Nigeria.
Credit Nigeria’s free loan search system will help you list and compare the best car loans in Nigeria.
Find the best car loans in Nigeria with Credit Nigeria’s loan comparison system.
Fill in your details on our form and we will start the search for you.
You get real life offers from verified lenders with the click of a button: all the research is done for you, and the service is free!
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