Target group:

Employees, merchants and companies who have accounts at Bank of Palestine or another bank.

Facilitation objective:

To purchase private and commercial vehicles from car agencies with facilitated conditions.

Term of facilitation:

  • Four years for used cars, and funding will be provided based on the car model, whereby whenever its model decreases from the year the funding is provided, the funding is decreased to the value of one whole year.

Example: a used car modelled 2003, and we are in 2015, the funding will be provided for a period not exceeding three years.

  • Five years for brand new cars.

Eligibility criteria:

  • Brand new and used cars whose production date does not exceed five years, and that could be fully mortgaged and insured.
  • The manufacturing date of the used car shall not be less than five years, with an official appraisal from an accredited authority, and the value of the appraisal is stated in the insurance policy.
  • The value of the car is adopted during the first year according to its price in the insurance policy. The appraisal shall be renewed every two years, hence the value of the car based on its price in the insurance policy (the appraisal) or the depreciation rate (15% of the car price) shall be adopted, whichever is less.
  • The value of the loan shall be in proportion with the client’s income, provided that total monthly installments do not exceed 50% of the monthly income.
  • For non-employees, borrowers must have an active bank account with a fixed salary and transactions proportionate with the value of the requested loan. Guarantors should also have fixed and regular salaries transferred to Bank of Palestine or other active accounts.
  • For clients who do not have active account at Bank of Palestine, the amount of funding shall be determined in accordance with their status and after studying each case individually.
  • In general, the life of the car shall be determined in accordance with the manufacturing date indicated in the license.
  • A car that has never been used and whose life does not exceed one year and has travelled zero miles shall be considered as a brand new car.
  • Concerning the replacement of a car mortgage with another car, the client shall be required submit the following:
  • To bring an official letter from an accredited insurance company indicating that the company is willing to insure the requested car, and mentioning all the details pertaining to the car, including its value, in order to trade off the car to be replaced with the car mortgaged by the bank.
  • Bringing a price offer clarifying the value of the car, its model and manufacturing date from the car dealership, if the car is brand new.
  • Providing an appraisal from an accredited authority in case of a used car.
  • Providing a letter of guarantee to transfer the salary and entitlements of clients, for those who have accounts at Bank of Palestine.
  • Providing a bank statement for the last three months for clients who have accounts or salaries transferred to other banks.

Interest rate:

  • 4% for brand new cars.
  • 5% for used cars.

Commission rate:

  • A one-time 1% deducted in advance upon receiving the loan.
  • Commission payment indicator: 4

Mechanisms for determining the approval of guarantors

Guarantors who are employees:

  • A fixed employee who works at an authority recognized by the bank (government officials both civil and military, UNRWA, Paltel, Jawwal, Wataniya, etc.)
  • Rejection of letters of guarantee from military employees recruited in 2005.
  • Total installments should not exceed 50% of the guarantor’s salary or his other debts (as guarantor and borrower).

Merchant guarantors:

  • Guarantors shall prove financial competence and solvency, and their monthly deposits shall be analyzed by studying transactions of their accounts over a period of one year, and a minimum period of six months, calculating 10% of their value to identify the limit of the loan that they shall carry in case the client who requested the loan fails to pay an installment.
  • Determined on the basis of 50% from net profits (to facilitate calculation, 10% of net profits were adopted).
  • In case the guarantor is a client at another bank, a statement shall be requested from the other bank for a period not less than one whole year, and a minimum of six months.
  • Provided that there are no due installments at other banks.

 

 

Item

An employee with BoP account

Funding percentage

100% for brand new cars, maximum $140,000

 

100% for used cars, maximum $70,000, provided that the manufacturing date does not exceed five years.

 

Guarantees

  • Proof of salary
  • Car mortgage
  • Insurance and endorsement of comprehensive insurance

 

Eligibility criteria

  • Installments shall not exceed 50% of the salary
  • Car insurance and licensing at the expense of the client and though him/her

 

 

 

 

A merchant with a BoP account

Funding percentage

85% for brand new cars, maximum $140,000

 

85% for used cars, maximum $70,000, provided that the manufacturing date of the car does not exceed five years.

 

Securities

  • A guarantor (employee / merchant)
  • Car mortgage
  • Comprehensive insurance.
  • The ability to accept addition securities, based on the client's evaluation.

 

Loan conditions

  • For the merchant guarantor: Good account status + turnover for the clients.
  • Car insurance and license at the expense and through the client.

 

 

 

 

A merchant with a bank account other than BoP

 

 

Funding percentage

  • 85% for brand new cars, maximum $140,000

 

  • 85% for used cars, maximum $70,000, provided that the manufacturing date of the car does not exceed five years.

 

Securities

  • Good credit + turnover
  • Two guarantors, provided that one of them is an employee whose salary is transferred to BoP.
  • Car mortgage.
  • Comprehensive insurance.

 

Loan conditions

  • For the merchant guarantor: Good account status (credit) + turnover.
  • Car insurance and license at the expense and through the client.