Car loan eligibility varies from lender to lender. Various lending institutions have specific requirements before considering individuals eligible for car loans.
Common requirements for car loan eligibility include:
- Being above the age of 18 years
- Being a South African citizen or permanent resident
- Having a valid drivers’ licence
- Having a clear credit record
- Earning above a certain threshold
Most lending institutions require various forms of documentation as well. This may include:
Proof of income
This may be in the form of bank statements or any additional assets you may have.
You need to produce some form of proof that you are employed and that you will be able to afford repayments comfortably. By providing proof of additional loans that you have taken out in your name and repaid fully, this may improve your approval chances.
Proof of insurance
In South Africa, car insurance is not compulsory yet. But providing proof of insurance may improves your chances of qualifying for a car loan.
Proof of identity
In South Africa, proof of identity is required for all loan applications – this isn’t exclusive to car loans. The lender you apply to for a car loan needs your identification in order to be able to conduct a credit check as well as to assess your affordability.
Proof of residence
The lending institution needs to be able to contact you directly for any communication related to your car loan.
When applying for a car loan, it may be advantageous to use car loan calculators in order to work out how much you will need to repay throughout the loan period.
Tips for improving your car loan eligibility:
Improve your credit record
Know what you can afford before you apply. It’s important to consider registration costs as well as insurance.
Find a car
Consider various finance options
