Finance and Insurance
To acquire a loan from a bank an
individual will need:
A photocopy of one's Identity Card
A photocopy of one's Identity CardA detailed salary statement, which includes the type of
work, net salary, all other outstanding debts (such as
mortgage payments, house rent, other loans, alimony).
This paper must be an official document from the
employee’s company.
Very few banks ask that people deposit their salary with them; and less than half ask for a referee. Those that do so usually ask for it if they deem the individual’s salary not to match up with the loan they are asking for.
However, a consumer who wishes to purchase a new car simply has to go to the dealership of his choice, pick out a car; then once the individual gets approval for a loan from a bank, the dealership will follow up the paperwork with the bank.
Purchasing a car has never been easier, with most banks offering competitive car loans that allow consumers to purchase cars on credit, in return for monthly installments that can span as long as 6 years and with minimal, if any, down payments.

According to a study conducted by the market research firm InfoPro and published by Lebanon Opportunities, there are different criteria that one must consider before asking for a car loan, depending on whether the car is a new one or a used one:

  • New cars usually require a smaller down payment with a lower interest rate
  • A down payment on a used car can reach roughly 40% of its value, with the interest rate on the loan reaching 2 percentage points higher than if the car was new
  • The length of a loan for a new car is longer than for a used one; with loans on new cars stretching as long as 6 years, whereas loans on used cars usually range between 4 to 5 years
  • 4Most banks that provide car loans require file charges of 25 to 50 dollars which are paid at the start of the loan. There is also a sum that needs to be paid with the monthly payments which covers the cost of the official stamps used.
  • Banks usually apply one of two methods to determine the price of late charges: they either consider it to be between 5 to 20 dollars, or they consider it to be between 1 and 2 percent of the monthly payment.
  • If an individual manages to pay off the monthly payments before the end of the duration of the loan, a bank will usually take this into consideration and lower the rate of interest to 2 percent. They are, however, unlikely to forgo the interest remaining on the loan in the event of early payoff.
  • Interest Rate Prices placed on these loans are flat i.e. they must be paid over the course of the loan
  • Interest Rate Prices are fixed for the duration of the loan.
  • The declared monthly rate does not represent the actual interest rate for the whole year. Interest rate percentages on loans are expressed in the Nominal Annual Percentage Rate (APR); however, the real Effective APR is in fact calculated differently. Consumers must be aware of this distinction; the nominal APR is the interest rate paid on a monthly basis added together for a whole year. The effective APR, on the other hand, is the fee plus the compounded interest, which is interest on interest. So while the rate is fixed, the amount on which it is calculated goes up with time, and thus the consumer will be paying more over the duration of the loan. As an example: for a 20,000$ loan on a new car with a nominal APR rate of 6.5, which is fixed, the consumer will actually be paying an Effective APR of 11.83 over the course of the loan, because of the compounded interest.
  • Once an individual receives the loan he is asked to register the mortgage on the car, which allows the bank to repossess it in the event that the payments are not being met or if the individual’s credit dries up
  • Consumers must be aware that all banks, as the law demands, require an individual to have insurance before they can be granted the loan.
  • Some banks allow the consumer to pay the insurance fees along with the monthly loan payments if they have signed on with the bank’s sister insurance company; whereas other banks require an individual to pay a whole year’s worth of insurance upfront.
  • Several banks also require an individual to purchase life insurance for the duration of the loan before the bank approves it, while other banks cover that cost themselves. This insurance premium can also be paid on a monthly basis or in one lump sum.