This article explains how car financing through banks loans in Kenya works and what you should look out for when applying for car loan.
Decide on the car
You first have to decide on the type of car you want to buy. If you have no specific preference on the brand of car you want, we do advice that you go for a Toyota car. Toyota cars have the best resale value in Kenya. They are also known to be durable and have low maintenance cost.
Car Financing Amount
This is the amount borrowed for the purchase of the car plus taxes and other fees. After you have decided on the type of car you want to purchase, the next step is to look at the amount.
Do your research well so that you can find the best deal on your car. You can use online marketplaces Like Jiji.co.ke, Cheki.co.ke and Cars Under 750k (Facebook group) to do your research but make sure you visit the shop selling the car before you engage in any transaction.
This is the amount of money you will pay back the bank. Always ask for interest rates before taking a loan.
Almost all banks in Kenya provide car loans for salaried individuals. The most important document that they need is your payslip.
Ensure that you have gone through the list of banks with the lowest interest rates that we have provided so that you don’t pay too much.
It is not advisable to go with financing from the car dealer you will be purchasing the car from. Most of the dealers provide car financing at exorbitant interest rates and have other hidden charges.
Loan Repayment Time
The longer the time you take to repay, the more the interest rates. Monthly Loan repayments have less interest rates than annual repayments.
NOTE: You can use any of the available online car loan calculators to determine how much you will pay back.
Important! Most Banks in Kenya do offer Financing of up to 90% of the car value. Make sure that you have the remaining 10% with yo as deposit.