We Worked Out How Much You’ll Pay Monthly If You Get The Uber/First Bank Loan For Drivers

Uber Nigeria has launched a first of its kind used vehicle financing where its top rated drivers can now get low interest loans for used vehicles.

Ebi Atawodi, General Manager for Uber in Nigeria explains;

“We are absolutely committed to making it as easy as possible for our driver-partners to start and maintain their own successful and profitable businesses and these used vehicle finance options make it possible for those with a demonstrable performance commitment to build sustainable businesses without incurring the high costs often associated with new vehicle purchases.”

Interest rates

• According to Uber, drivers can get these loans at a “competitive interest rate” of “just 20%” over a 24 month repayment period.
• They also have an “alternative offer” of 22% for a 36 month repayment period.

Qualifications

• According to First Bank,  Uber driver-partners will need to be able to demonstrate an average driver performance rating of higher than 4.5 and have earned more than N2,400,000 in the preceding 6 months.
• That’s about N400k monthly or N100k weekly.

Scenario

We worked out two scenarios assuming you want to go for this product. Scenario 1 is that you get a N5 million loan for 24 months and Scenario 2 a N5 million loan for 36 months.

24 months

Loan Value – N5 million

Period – 24 months

Interest Rates – 20%

Total monthly Loan repayment (Principal + Interest) – N254, 479.01

Total Amount you’ll pay at the end of 24 months – N6, 107,496.24 (Interest part of that is N1,107,496.24).

36 Months

Loan Value – N5 million

Period – 36 months

Interest Rates – 22%

Total Monthly Loan repayment (Principal + Interest) – N185, 817.92

Total Amount you’ll pay at the end of 24 months – N6, 689,445.12 (Interest part of that is N1,689,445.12).

Parting shot

The difference between option one and two is about N581, 948.8. Option 2 is costlier by that difference. This means a lot in terms of profitability. However, in terms of cash flow and ease of payment taking a loan for 36 months can provide some buffer. The question willing drivers should ask themselves is, can I make about N185.8k monthly after paying for fuel and other cost of driving.

That’s why it is for Top Rated Drivers.