Do You Need A Car Loan?

1. Do You Need A Car Loan? A car loan is a type of loan given by banks to individuals using the car they are purchasing as an “asset” as a guarantee for the loan. The typical period is between 1 to 7 years. What’s the difference between a car loan and a personal or home loan? The difference is; personal loans do not include an asset guarantee (whereby the guarantee is only your salary) and home loans are guaranteed by the house purchased with tenors up to 20 years. Whereby, a car loanis guaranteed by the car you purchase and you are not allowed to sell it or renew the license without the bank approval. What do I need to be eligible for a car loan? The required documents for the car loans are: • A positive credit rating (a good I-Score result) • A balanced Debt Burden Ratio (DBR), which means that the amount you are looking to borrow added to your existing loan obligations, does not exceed your ability to pay back the amount based on your proven income. For example: Your obligations shouldn’t exceed 50% of your salary. What are the typical documents needed?

2. The documents needed for a Car Loan differ based on your employment type and on the bank extending the loan, that’s why we use the car loan calculator. The following are the typical documents requested: General (for all): oValid National Identification (National ID or Passport) oProof of Address (Rental contract or utility bill) oBank statements for the last 3 to 12 months proving income level (depending on the bank extending the loan) If an Employee: oHR Letter specifying (i) Net income, (ii) Hiring date, and (iii) Position If a Professional: oValid Syndicate Card oPractice Certificate (if applicable) oTax card If Self Employed: oCommercial register oTax card • Car Documents oNew Cars: ▪ Performa Invoice from the Showroom • Used Cars ▪ Certificate from an authorized service center with car condition and market price ▪ Copy of the car registration How much does a car loan cost? There are five main variables to take into account when looking at the cost of a car loan: 1.Interest Rate: The interest rateis the main cost factor when taking a car loanand it is the amount that is charged depending on the period of the loan. Interest rates are expressed in two formats but they both lead to the same interest amount: 1.Decreasing Interest Rate: This rate is the percentage to be charged against the outstanding amount of the loan only in any given period 2.Flat interest rate: This rate is a different presentation format which showed the percentage to be charged against the initial amount borrowed. 2. charged in the beginning of the loan as a fixed one-time payment that are deducted from the amount you are borrowing. Admin fees range from 1% to 4% depending on the bank. 3. Stamp Duty: The Central Bank of Egypt charges 0.05% per quarter on the outstanding balance of the loan (basically the amount you still owe). This is standard between all banks. Administrative Fees:The administrative fees “Admin Fees” are fixed fees that are

3. 4. and any damage in general. The cost of insurance ranges between 2% up to 4% of the car value per year, while some banks allow you to pick your own insurance company others will insist on a specific company. 5. Down Payment: While not exactly a cost, the percentage of the car you are willing to pay as a down payment affects (a) which banks will lend you, (b) interest rates within the same bank, and (c) conditions around the car. Down payment ranges can be between 0% (very few banks offer that) up to any number. Make sure you check the differences in interest rate vs. down payment percentages to get the best deal for you. Can I buy any car? That again depends on the bank; there are three main categories to consider here: • New vs. Used: Most banks finance new cars, but some banks finance used cars as well. The process, documentation and pricing is different from one to the other though. When used cars are financed they typically only finance cars that are up to 5 years old. • Brands: This is a bank specific issue, whereby some banks do not finance Chinese cars in particular and avoid some other brands as well. This reflects on the banks view of the lifespan and the potential resale value of the car. • Personal vs. Commercial: Again this is a bank specific issue, some banks allow for commercial licenses while others do not. (Please note that this comment only relates for personal car loans and not car loans undertaken by a business) How do I apply for a car loan? Currently you apply for a car loan by either calling the call center of your bank or visiting a branch, a loan officer will take you through the process. To make sure you have an efficient process make sure to visit our car loan page https://www.faydety.com/en/borrow/car-loan to make sure you are eligible and have the required documentation ready. There are some differences between car loans in the different banks is the interest rate, and you can easily find out the most suitable loan for you through the car loan calculatoron Faydety. In general, banks give you finance between 20 thousand to one and a half million pounds, with a minimum net income of 1000 pounds, and of course you must transfer your salary to the bank from which you will take the loan. After choosing the bank you can apply easily to the loan by either calling the call center of your bank or visiting a branch of the choosing bank. Contact Us: Email id: info@faydety.com Website: https://www.faydety.com/en/save/cards Car Insurance: All banks will require that the car is insured against accidents, theft