AI agents for business finance: what they can and can't do
What AI agents can do in bookkeeping, close, collections and compliance today, where a person must stay in charge, and how to judge a product.
The short answer
Yes: some Nigerian lenders will lend against a car you already own, holding a security interest in it until you repay, but most bank vehicle finance is for buying a car, not for releasing cash from one. The lender values the car at less than its market price, lends only part of that value, and can repossess and sell the car if you default.
"Logbook loan" is a British term for a loan secured on a car the borrower already owns. In Nigeria the same idea goes by several names: car collateral loan, car title loan, loan against your vehicle. The borrower usually keeps driving the car, while the lender holds the papers or registers a claim over it until the debt is cleared. It is a different product from a car loan, where a bank pays a dealer for a car you are buying.
Who lends against an owned car in Nigeria
The big banks publish their vehicle products as purchase finance. Sterling Bank's used-car finance, for example, lends towards buying a second-hand car and registers the vehicle in the bank's name until repayment (Sterling loans page, Oct 2026). Lending against a car you already own is offered more by finance companies, some microfinance banks and licensed money lenders, and less often as a published bank product. If a lender advertises it online or through an app, it falls under the FCCPC's digital lending regulations made in July 2025, which require fees and repayment terms to be disclosed in full before you commit.
Whoever the lender is, the claim on your car should be visible. Under the Secured Transactions in Movable Assets Act 2017, Nigeria runs the National Collateral Registry, operated by the CBN. Its site says a lender registers its security interest there, priority goes by time of registration, and anyone can search by BVN, business name or the collateral's serial number after paying online. The registry also states that only institutions licensed by the CBN or under BOFIA can take security interests on it.
How the car is valued
A lender does not lend the price you think the car would fetch. It asks what it could recover by selling the car quickly after a default, and then lends a share of that. Purchase-finance rules give a useful guide to how cautious lenders are:
- Sterling Bank finances used cars only up to 10 years old from manufacture, from a short list of brands, after a certified inspection that checks the VIN, and asks for 30% equity, so it lends at most 70% of the price (Oct 2026).
- Stanbic IBTC states it will not finance used vehicles older than 20 years or with more than 120,000 km on them (Oct 2026).
- Both require insurance; Sterling asks for comprehensive cover naming the bank as first loss payee.
Expect a lender against an owned car to be at least as careful: an inspection, a valuation report, a loan of well under the car's market value, comprehensive insurance, and often a tracker or a spare key held by the lender.
Worked example: what a car collateral loan costs
Ada owns a car valued at ₦8,000,000. A lender offers ₦3,000,000 for 6 months at a flat 5% per month, with a 2% processing fee taken upfront.
| Item | Amount |
|---|---|
| Loan | ₦3,000,000 |
| Processing fee (2%) | ₦60,000 |
| Interest (5% × ₦3,000,000 × 6 months) | ₦900,000 |
| Monthly repayment (₦3,900,000 ÷ 6) | ₦650,000 |
| Total cost of credit (fee + interest) | ₦960,000 |
A flat 5% a month is 60% a year on the original amount, and because the interest is charged on the full ₦3,000,000 even as you repay, the true yearly cost is higher still. Ask the lender to state the rate the same way for every offer (per month, per year, flat or reducing balance) and to give the total repayable in naira.
The risks
- Repossession. Default lets the lender take and sell the car. Sterling's own vehicle terms, for comparison, start asset recovery after two months of missed payments.
- Selling below value. A forced sale rarely achieves market price, and any shortfall plus costs may still be owed.
- Losing your income. If the car is a taxi, ride-hailing or delivery vehicle, losing it can stop the income that repays the loan.
- Unclear paperwork. Handing over original papers without a written agreement and a registry filing leaves you with little proof of what was agreed.
What to check first
- Confirm the lender is licensed, and if it is a digital lender, check the FCCPC register of approved digital lenders yourself.
- Get the full agreement before signing: amount, rate and how it is charged, every fee, repayment dates, late charges and when repossession can start.
- Ask whether the security will be registered with the National Collateral Registry, and ask for the discharge to be filed when you repay.
- Keep copies of the vehicle papers you hand over and a signed receipt for them.
- Compare the cost with a personal loan or with other collateral banks accept before using the car.
Where Pryme fits
Pryme does not lend against cars. If the cash is for spending such as groceries, pharmacy, school fees or transport, Loans on Spaces from Solid Allianze MFB is a different route: a limit may be offered based on how your account is run, can only be spent with merchants in Spaces, and you see the full agreement before you accept. If you are building towards a car instead, see how to save to buy a car and a Savings Box. For what happens when car loans go wrong, read car loan default and repossession.
Questions people ask
Can I use my car as collateral for a loan in Nigeria?
Yes, some finance companies, microfinance banks and money lenders lend against an owned car. Banks mostly publish vehicle finance for buying a car. The lender values the car, lends part of that value and holds a claim on it until you repay.
How much can I borrow against my car?
There is no fixed share in law. Lenders lend well below market value; for comparison, Sterling Bank's used-car purchase finance requires 30% equity, so it lends at most 70% of the price (Oct 2026).
Will I still drive the car during the loan?
Usually yes, but the lender may hold the papers, register a security interest with the National Collateral Registry, fit a tracker or keep a spare key.
What happens if I cannot repay a car collateral loan?
The lender can repossess and sell the car under the agreement. If the sale does not cover the debt and costs, you may still owe the difference. Read the default clause before signing.
Sources
- National Collateral Registry Nigeria: How to · accessed Oct 2026
- Sterling Bank: Loans (Home Acquisition Finance Facility, Vehicle & Asset Finance) · accessed Oct 2026
- Stanbic IBTC Bank: Vehicle and Asset Finance · accessed Oct 2026
- FCCPC: Digital, Electronic, Online, or Non-Traditional Consumer Lending Regulations 2025 · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.