How To Qualify For Cooperative Bank Car Loan

Cooperative Bank is one of the leading providers of vehicle loans here in Kenya. The company offers asset finance loans for new vehicles and pre-owned vehicles which are a maximum of 8 years old. These loans are currently being accessed by individuals and business all over Kenya. The bank offers up to 100% vehicle financing subject to terms and conditions. The borrower applying for vehicle loan has to however meet set requirements by the bank.

Applicant’s ID and KRA PIN Certificate
Letter of Introduction from the employer
Latest 3 months’ certified Pay slips
Latest 6 months’ bank statements (if you’re not banking with us)
Copies of employment contract, or letter of appointment
Motor Vehicle Sales Agreement/Proforma Invoice
Copy of Logbook/Import Documents/NTSA search records
Original valuation report from approved valuer in the Bank’s panel

Fill the loan application form
Attach the required documents and submit to your preferred Cooperative Bank branch

Loan approval is subject to the 5 C’s of Credit. The bank will try and find out if you are best suited to repay the loan. This will also help the bank analyze the maximum loan amount to be issued. The 5 C’s of Credit are as follows:

Character: What’s your credit history?
Capacity: What’s your debt to income ratio?
Collateral: In case you fail to repay the loan can the bank recover loan balance through selling the car after repossession?
Conditions: What market factors can be accommodated? E.g interest rate, principal, market conditions
Capital: How much money can you put towards buying the car as a commitment to being a serious vehicle buyer?

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The borrower is issued with an offer letter to sign and present to the vehicle dealer.
The borrower will pay deposit for the vehicle to the dealer where applicable
The vehicle dealer signs off and initiates joint vehicle transfer to the borrower and Cooperative Bank.
The borrower returns signed offer letter and original vehicle logbook to the bank.
The borrower pays for vehicle tracker installation from an approved vehicle tracking company in the bank’s panel
The borrower buys comprehensive vehicle insurance and submits copy of insurance confirmation form noting interest of Cooperative Bank to the bank.
The bank then issues a release letter to the dealer and clears vehicle payment amount
The borrower can proceed to pick the vehicle

You are required to pay monthly loan repayments until you clear the loan balance.
Failure to repay the loan can result in the bank repossessing your car and auctioning it to recover its loan balance.
Vehicle repossession will hurt the borrower’s credit history and negatively affect future loan applications.
Vehicle loan repayment is supposed to continue as usual even if vehicle has been grounded, stolen or written off following an accident unless special communication has been issued.
The insurance company will make payment directly to the bank in the event that the vehicle is stolen or written subject to insurance claim acceptance. The bank will clear the loan balance and deposit remaining funds to the borrowers account.

You can repay your loan through lump sum payments that knock off the principal and reduce interest expense and the loan repayment period.
In case you have short term challenges repaying the loan write an official letter to the bank requesting a moratorium (loan restructuring where you can be able to resume consistent loan repayment after the short period).
In the event that your vehicle is repossessed. You can pay the loan arrears and auctioneer fees. You will be able to collect your vehicle and continue with the loan repayment
You can look for a buyer to purchase your car through a tripartite agreement involving you, the buyer and Cooperative bank in the event that you feel that you want to abandon the loan obligation before payment completion.

This article has been prepared by Joseph Muongi; Managing Director at Finatrack Global Ltd. We are approved vehicle tracking service providers for Cooperative Bank. Feel free to get in touch with us while applying for your loan to get assistance related to efficient vehicle tracker installation and general advice.

You can call us through 0723 645 810 , Email: info@finatrack.co.ke