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Nedbank vehicle/car finance

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Nedbank Vehicle Finance also known as MFC offers two different finance options available. One of them is sure to be the one you want.

There are two different finance options available. One of them is sure to be the one you want!

In addition you may want to add a Balloon payment option

You may then choose from two different rate options.

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Installment Agreement

An instalment agreement is applicable when a client purchases a vehicle  from the bank over a negotiated period at an agreed interest rate. It is a financial facility for a vehicle  selected by the client. The vehicle is  purchased by the bank, and then sold to the client on specific terms.

The client undertakes to repay the full value of the vehicle, plus finance charges, in instalments over an agreed period. Ownership of the vehicle remains vested with the bank until receipt of all amounts due by the client, upon which ownership automatically transfers to the client.

The instalment agreement is best suited to:

  • Clients wishing to retain ownership of vehicle
  • Private individuals and car allowance users

Features, Benefits and Terms of the Instalment Agreement

  • Enables you to purchase a vehicle without first having to save the full value thereof
  • Repayment period and deposit can be structured to suit your needs
  • Repayment periods range from 24 to 72 months for individuals and car allowance users.
  • VAT is capitalised upfront.
  • Interest rates are either linked to the Prime Lending Rate or Fixed for the agreement period
  • Payment option to select from:
  • The vehicle  must be comprehensively insured during the term of the agreement.
  • Ownership of the vehicle is transferred to the client when the last payment has been made.
  • You get the benefit of any resale value
  • Interest rates are linked to the Prime Lending Rate for the agreement period

Qualifying criteria

The vehicle finance is subject to credit approval.

Lease Agreement

A lease agreement provides clients with uninterrupted use of a vehicle rather than ownership of the vehicle. It is a financial facility whereby a vehicle selected by the client is  purchased by the bank, and then used by the client for an agreed period, during which the client pays cost-related rentals. Ownership of the vehicle remains with the bank for the duration of the agreement. Please contact your accountant  or tax consultant to discuss the various options you have,  to suit your personal financial needs at the end of term.

There are four options available upon termination of the lease agreement:

  • Return the asset to the bank
  • Purchase the asset from the bank
  • Sell or trade-in the asset on behalf of the bank ( the most popular option)
  • Lease the asset for a further period from the bank

The lease agreement is best suited to:

  • Car allowance users
  • High-cost items such as motor vehicles
  • Small businesses using vehicles which are likely to become obsolete or which are replaced on a regular basis

Features, benefits and terms of the lease agreement

  • Enables you to lease a vehicle without first having to save the full value thereof
  • Repayment period and deposit can be structured to suit your needs
  • Repayment periods range from 24 to 72 months.
  • Monthly rentals (instalments) are tax deductible.
  • Interest rates are either linked to the prime lending rate or is fixed for the agreement period.
  • Payment option to select from:
  • The vehicle must be comprehensively insured during the term of the agreement
  • You have the option to take ownership of the vehicle when the last payment has been made
  • You get the benefit of any resale value

Qualifying criteria

The vehicle finance is subject to credit approval.

Balloon Payment Option

The balloon payment option offers the benefit of reduced monthly repayments, with a lump sum repayment (referred to as the balloon payment) at the end of the agreement period.
At the end of the agreement period you have the following options:

  • Apply to refinance the balloon payment amount for a further period. Terms and conditions will apply.
  • Trade in the vehicle.
  • Take ownership of the vehicle by paying the full balloon payment amount.

The Balloon Payment Option is best suited to:

  • Car allowance users

Features and benefits

  • Lower monthly payments for improved cashflow.
  • Flexibility to refinance, trade in or take ownership of the vehicle.

Rate Payment Options

MFC offers you the flexibility to select from one of two rate options:

  • Linked-rate option
  • Fixed-rate option

Linked-rate option
The Linked Rate Option provides you with the potential benefits of fluctuating interest rates.  In the event that the interest rate increases during the agreement period, your interest rate and therefore your repayments will increase accordingly. The reverse also applies – if the interest rate decreases during the agreement period, you will benefit from lower corresponding repayments.

  • Individuals and car allowance users

Features and benefits

  • Interest rate is linked to prime for the duration of the agreement period.
  • Monthly instalments fluctuate throughout the agreement period as and when the interest rate increases or decreases.

Fixed-rate option
The fixed-rate option provides you with peace of mind in terms of fluctuating interest rates. In the event that the interest rate increases during the agreement period, your repayments will not be affected and your interest rate will remain the same.

The Fixed Rate Option is best suited to:

  • Individuals and car allowance users

Features and benefits

  • Interest rate is fixed for the duration of the agreement period.
  • Protects you against negative cash flow implications of interest rate fluctuations.
  • Monthly instalments remain the same throughout the agreement period, which allows for accurate budgeting.

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