1. Personal banker
2. What does the term ‘car loan’ mean?
3. How can I obtain a car loan?
4. How is the car loan repayment period decided?
5. What collateral is needed for a car loan?
6. How is the car loan interest rate set?
7. What is the total cost of my car loan?
8. What is the Annual Percentage Rate (APR)?
9. How is interest calculated?
10. What happens if I delay paying my instalments?
11. When do I have to pay my instalment?
12. What happens if conditions change and I have difficulties in repaying my instalments as I had planned?

1. Personal banker

To ensure that you receive proper service and can discuss all the details of your loans so that they fully satisfy your personal needs, we have introduced Personal Bankers who are highly-trained individuals at our network of branches. These officers offer rapid, responsible, professional customer service and you can discuss with them everything needed to tailor your car loan to your needs.

2. What does the term ‘car loan’ mean?

A car loan is a loan provided by the Bank to allow you to buy a new or second-hand car of your choosing.

The car is financed based on hire purchase terms and conditions. In other words, after the loan is approved, the car is transferred by the seller into the name of the Bank and your name. When the hire purchase loan is paid off, the car is transferred to you as the sole owner after you pay a small token amount to the Bank as the purchase fee.

3. How can I obtain a car loan?

You can obtain a car loan if you are aged 18 to 65, are in work or have other sources of income.

The procedure for obtaining a car loan is straightforward, since you can submit an application for a loan directly to the car dealer. Of course, you can also submit your loan application at any of our branches.

When your loan is being examined, you may be asked to pay a down payment or provide collateral such as personal guarantees. Once approval is given for the loan, you can sign the necessary documents at any branch of Bank of Cyprus Hire Purchase & Leasing or our network of bank branches, or in some cases at the seller’s offices depending on the loan amount.

Once the paperwork is signed and the approval terms and conditions are met, the Bank will pay the seller the price and you can pick up the car immediately.

4. How is the car loan repayment period decided?

The repayment period depends on the type of car. In other words, if it is a new car, you can enjoy a longer repayment period compared to a second-hand car.

Another definitive factor affecting the loan repayment term is the size of the instalment you are able to pay, meaning that a low instalment increases the overall loan term while a higher instalment shortens the loan term.

5. What collateral is needed for a car loan?

The collateral for the loan is the car you purchase. There are cases where you may be asked to provide additional collateral such as personal guarantees, blocked deposits, etc.

6. How is the car loan interest rate decided?

The loan interest rate depends on:

•  the type of car, i.e. whether it is an old or new car
•  the size of down payment made, i.e. the higher the down payment the lower the interest rate.

The loan interest rate is variable.

7. What is the total cost of my car loan?

The total cost includes:

•  interest
•  the purchase fee specified in the loan contract
•  Government charges such as stamp duty and vehicle transfer charges.

If the loan is repaid in accordance with the loan contract there will be no extra charges.

8. What is the Annual Percentage Rate (APR)?

The APR is the total cost of borrowing for the consumer, expressed as an annual percentage on the loan offered. The APR includes all loan cost factors (including interest and all charges, which consumers have to pay).

The APR is the best tool available since it includes all loan costs and helps you have a better picture when comparing various products from the Bank or other banks.

9. How is interest calculated?

Some useful tips on how loan interest is calculated are provided below:

•  Interest is always calculated on your daily loan balance. As a result, over time interest reduces given that the loan balance decreases because of the payments you make.
•  Interest is calculated by multiplying the daily loan interest rate by the daily balance.
•  Interest I accrued is added to the loan balance (capitalised) twice a year on specific dates (30/6 and 31/12).

10. What happens if I delay paying my instalments?

If you do not repay your loan as agreed, additional charges will be applied. The charges take the form of a higher interest rate on the amount that has not been paid. To avoid any additional charges, make sure you repay your loan instalment on the specific date agreed.

11. When do I have to pay my instalment?

Your instalment must be paid on the date specified in the loan terms and conditions. To avoid paying unnecessary charges, talk to your Personal Banker to arrange a date from the outset which suits you for payment of the instalment. If that date changes in the future, you should contact your Personal Banker in good time to make the necessary adjustment. To make things easier for you, the right thing to do is to give the Bank written instructions so that your instalment is paid automatically from your current account.

12. What happens if conditions change and I have difficulties in repaying my instalments as I had planned?

If your financial situation changes and you cannot repay your debts and pay your instalments as agreed, you should contact your Personal Banker in good time to arrange a new repayment schedule which reflects your new circumstances.