Car loans have vastly spread around Lebanon in a record-breaking time. These loans are available for buying new cars, old cars up to 10 years in many banks around Lebanon, taxis and commercial vehicles, trucks, and motorcycles.
Car loans are characterized by four main features:
- Flat interest rate: A fixed rate on the amount borrowed
- Minimum down payment: The minimum initial amount the customer should pay in the beginning
- Maximum loan period: The maximum number of years allowed for the customer to pay back the loan
- Maximum lending amount: An upper limit for the loan value
These figures differ between banks in Lebanon. The flat interest rate applied on a car loan could depend on the down payment. As the down payment increases, the interest rate decreases in some banks. For used cars, the car manufacturing year affects the flat interest rate and the minimum down payment required from the bank: An older car could mean a higher interest rate or a higher down payment. On average, new car loans have a longer period and higher maximum lending amount than used car loans. Concerning the maximum loan amount, many banks do not specify any upper limit for loans. Some banks require you to get a guarantor, in order to apply for a car loan.
Facts and Figures
Most car loan packages in Lebanese banks are only provided in US dollars, thus at a low interest rate. Some banks require no down payment at all, while others charge minimum down payments up to 30% or 50% for new and used cars. The average minimum down payment in Lebanese banks is 16.7% for new cars and 22.5% for used cars. Furthermore, the average flat interest rate on new cars across banks in Lebanon is 4.3%. This is much lower than the average rate on used cars, which is 6.28%.
Loan periods in Lebanese banks usually range between 3 and 6 years, with some loan periods reaching up to 7 years. The average lending period for new and used cars is around 5 years.
When you head to a bank to apply for a car loan, the bank should display a full simulation of your car loan. The amount you are being lent is of course specified by your car choice. You can decide on the down payment and loan period (in most banks). According to the simulation and prices, you would then choose the best combination that suits you.
Visit bnooki.com to compare and simulate car loan packages among banks in Lebanon.