When choosing an asset finance partner, it is important that you conduct in-depth research. You need one that is flexible and has a low-interest rate compared to others. Finding one that has some value addition to the finance package is also a plus. But how will you know which asset finance partner to settle for?
We have highlighted some factors that you can consider when choosing the right asset finance partner.
Should you settle for a bank or a Sacco?
Most banks have a significantly higher interest rate compared to Saccos placed on the principal amounts. However, they have some enticing value additions added to them such as fast loan approvals and flexible payment terms. On the other hand, Saccos offer lower interest on loans but usually, one is limited to the amount of money they have saved within the Sacco.
Value addition
Take time to find out which financing partner is offering real value for money. Go deeper and find out which once come with add ons such as insurance packages and flexible payment terms. Value addition will help you save some money in the long run and we are all in the business of cutting costs while getting value.
Payment period
If you prefer a longer payment period, Saccos are the way to go. Their payment options are very flexible and they offer longer loan repayment schedules. Additionally, they can also extend extra loan facilities to loyal members.
Banks are more strict on repayment but on completion of the loan, you may be eligible for higher loan limits or credit extension. Most banks offer between 36-60 months repayment period.
Banks can be a very good option if you belong to a matatu Sacco and would like to purchase a commercial vehicle. They assume you will be able to pay them back faster thus offering you better payment rates.
Commercial or Personal?
If you are taking out a loan for a personal vehicle, you are better off getting financing from your Sacco, due to the lower interest rates and flexible rates as discussed above.
If you are buying a car for commercial purposes, being financed by a bank is way better as they allow you to borrow more depending on your credit score. In the event, you want to expand your fleet, the bank will assign you a relationship officer who will advise you on how to repay your loan with ease and maximize your profits.
Conclusion
Based on the information above, you will be able to choose an asset finance partner that suits your needs. Ensure you conduct in-depth research and ask other car owners what worked for them. Additionally, it is important to put together all the documents that you need for the loan to be processed. We hope that you found the above tips helpful.