How to get a truck loan in Kenya

February 28, 2022

There are two main ways of purchasing a new truck in Kenya:

  1. Cash
  2. Asset Finance

Cash involves payment of the complete truck price by the buyer. Asset Finance involves partial payment of the truck price by the buyer and payment balance by the bank or financing institution. Asset finance refers to a loan where the main security is the asset being purchased. Therefore the truck serves as the security when taking a truck loan. The bank has a right to reposses the truck and sell it to recover its loan in the event that the buyer fails to repay the loan as agreed.

These are the standerd requirements when applying for a truck loan from most banks:

  1. Your Personal or business account 6 months bank statement
  2. Copy of ID or Company Registration Certificate
  3. Copy of KRA Pin

Approval for your loan will then depend on the following factors:

Capacity: You should be able to prove that you’ll be able to repay the loan. (tip: your average monthly deposits should be 5 times the monthly loan repayment)

Character: You should be able to have a clean credit record

Condition: You should be able to prove that your truck will be aengaged in a viable business that can repay the loan.

Capital: You should be able to raise deposit to be paid for your truck.

The banker offers better terms to safer clients who have a lower risk of default. The lower your risk the higher the bank is willing to finance. Once you’ve established your eligibility; contact a dealer selling your preferred truck. Request a proforma invoice or quotation which you can then share with the bank. The bank will assess this and send an offer letter to the dealer after approval of your loan. The bank will request joint vehicle registration through NTSA.You will then pay the deposit directly to the dealer and share receipt with the bank. The bank can then send a release letter to the dealer acknwoldging acceptance of joint registration between the bank and client and proof of balance payment.

You will now be able to collect the vehicle from the dealer.

NB: When purchasing a vehicle through asset finance, the bank will need the vehicle to have a tracker installed by a company on its Tracking Service Provider Panel.The tracking company will have to install the tracker and share the certificate with the bank.

Finatrack Global Ltd is currently in the following Tracking Panels: Cooperative Bank and Family Bank. Contact them directly when getting asset finance through the named banks. USE TRUCK.CO.KE referal to get 10% of your tracking cost. Click HERE to learn more

 

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