After investing in real estate, purchasing a car appears to be the second-biggest financial decision that people make in a nation like Pakistan. These days, you can also purchase the car of your dreams in manageable installments by selecting from a variety of bank loan plans that provide auto financing in Pakistan. However, you must first have a thorough understanding of the current auto loan rates in Pakistan, which is all we will cover in this blog.
Which bank in Pakistan provides auto financing?
Now, practically all of Pakistan’s top banks provide auto loans.Nowadays, practically all of Pakistan’s top banks, notably Habib Bank Limited (HBL), Bank Alfalah, and Habib Metro, Meezan Bank, Dubai Islamic Bank, JS Bank, UBL, and Bank Al Habib.
The majority of these financial institutions have begun to offer auto finance for both new and used cars in light of the recent expansion of the market for imported and reconditioned automobiles.
The steps involved in applying for auto financing
Each bank has a different process you must follow in order to apply for a car financing plan. Nonetheless, save a few minor exceptions, the paperwork and requirements for auto financing in Pakistan are essentially the same. Depending on the length of the installment plan you select, you can notice a difference in Pakistani auto loan rates.
Qualifications for Pakistani Auto Loan Applicants
Pakistani auto loan candidates must adhere to specific eligibility requirements, the filing of necessary paperwork, and proof of financial stability. Therefore, have a look at the following guidelines to find out if you are qualified to apply for auto financing in Pakistan:
- You must first possess a Pakistani Computerized National Identity Card (CNIC).
- Individuals between the ages of 22 and 65 are eligible to apply for auto financing. (Bank to bank, the age range may differ.)
- Auto finance is available to applicants who have a reliable source of income, such as rental revenue, monthly pay income, income from an active business, or income from agriculture.
The following set of documents is typically required when applying for a car loan:
- A photo the size of a passport.
- A copy of your CNIC and bank statements for a specific time frame, often six months, to confirm that the applicant has a reliable source of income
- Pay stubs or certificates, if the candidate is employed
*The documentation needed for auto financing in Pakistan may differ significantly depending on the bank.
What kind of car can you afford to buy in installments?
In Pakistan, a brand-new car’s monthly payment starts at about PKR 20,000.
Note: The down payment amount, which is assumed to be 15% in each of the four aforementioned scenarios, may affect the monthly installment and initial deposit rates. Furthermore, the processing cost could differ between banks and cars.
Current Estimated Auto Loan Interest Rates in Pakistan Provided by Various Banks
After talking about the requirements for eligibility and supporting documentation for vehicle financing in Pakistan, let’s look at the table that provides us with an approximate idea of the rates for auto loans based on the length of the installment plan, which typically ranges from one to five years. In the table below, the principal amount is estimated to be PKR 10 lakh with a 15% down payment.
- The principal amount is one million PKR.
- 15% down payment: 1,50,000 PKR
- Amount of Funds: PKR 8,50,000
Keep in mind that you should review the current auto loan rates before investing in any vehicle finance scheme.
Final Thoughts
Remember, before investing in any car finance scheme, you need to go over the current auto loan rates in Pakistan. Due to rising inflation rates, auto finance rates might differ as time goes on, so you should weigh all your options before deciding on auto financing in Pakistan, as it is an easier way to pay in installments while enjoying your car.
