Tips on Choosing The Right Asset Finance Partner

  | 3 min read
asset finance


You must carefully choose the right Asset Finance partner to help you with the purchase of your dream car. Choose one that is flexible, has a significantly lower interest rate plus offer value addition to the finance package.

Below are some of the tips you may consider when identifying the best asset finance partner.

Bank or Sacco?

Both Banks and Sacco societies have good packages to attract customers. In the matter of banks, they have a significantly higher interest rate taken out of the principal amount, but now have value addition injected to make their packages enticing.

For example:

  • Fast loan approvals Insurance
  • Tracking and flexible payment terms
  • On the other hand, Saccos offer lower interest on loans but one is limited to the amount saved in the Sacco

Value addition

Take time to asses which financing partner is offering real value for money with goodies as mentioned earlier. These good include things like Insurance packages and flexible payment term.

This allows you the benefit of saving every single cent that you may have spent on the loan and gives you the ability to choose wisely.asset finance

Payment period

Go for the finance partner with the most flexible terms. This is where Saccos have an upper hand, as they offer members longer loan repayment schedules. They can also extend extra loan facilities to a loyal member.

Banks, however, may be strict on repayment but on completion of the loan may offer the customer a higher loan limit or credit extension. Most banks offer between 36-60 months repayment period.

This is very convenient for customers who purchase commercial vehicles, as sometimes banks offer better rates when commercial vehicle buyers in groups (Matatu Saccos) negotiate for lower loan terms due to the sheer numbers.

Commercial or Personal?

If you are taking out a loan for a personal vehicle, you are better off getting financing from your Sacco, due to the lower interest rates and flexible rates as discussed above.

If you are buying a vehicle for commercial purposes, being financed by a bank is way better as they allow you to borrow more if you fulfil your credit terms. This comes in handy when you need to expand your fleet rapidly.

The bank will make sure that the credit facility is given to you and at times become a part and parcel of managing your loan. They will accord you a relationship officer who will advise you on how to repay your loan with ease as you maximize your profits.

Trevor Lamenya