A Guide for Car Loans in the Philippines for First Timers

Buying a car is a rite of passage for many adults. But don’t you fret in case you can’t afford your own set of wheels with your entire life savings. With many banks and private lending companies giving out lending programs, getting auto financing has never been easier.

Nevertheless, you shouldn’t plunge into a car financing deal without first arming yourself with the necessary knowledge. So for your convenience, below is a guide for car loans in the Philippines for first timers.

Check Your Financial Status

First things first, you need to determine whether or not you can afford the auto loan. Taking up any kind of loan is a big financial responsibility, and you should only get one if you can repay it on time and in full. Therefore, you need to thoroughly scrutinize yourself before setting foot at the bank or lending firm. Consider your monthly income and check if you can set aside part of your budget to devote to repaying a car loan.

Pick a Car

Next comes the fun part of browsing for your dream car. Most car financing providers look at a car’s price when reviewing applicants. So whether you’re looking for a new auto or a secondhand one, you need to have a specific vehicle in mind prior to submitting your loan application. That way, the bank can better deliberate the amount of money they’ll lend to you, and you’ll be able to estimate the subsequent monthly payments you need to make.

Compare Loan Products

After you’ve picked the car you want, make a list of available car loan products so you can compare them with each other. If you can, use an auto loan calculator to more accurately determine the down payment, the loan amount, the interest rates, and what-not. By comparing different lending programs, you’ll be able to find the one that would suit your needs and preferences the most, and doing so can help you save money in the process.

Check If You Qualify

Once you’ve screened out the loan products and found the one that’s right for you, see if you can meet their requirements. Eligibility and criteria for lending programs vary depending on the bank or private financing firm. However, the basic requirements remain relatively the same.

⦁ Filipino citizenship.
⦁ At least two valid, government-issued IDs.
⦁ Proof of income.
⦁ Proof of billing
⦁ Copy of OR/CR (for car collateral loan applicants)

To properly check if you qualify or not, visit your chosen moneylender’s website or office.

Submit Your Application

As soon as you’ve determined your eligibility and gained the necessary paperwork, proceed with submitting your loan application. You can do this either by visiting the bank or lending company office or via the internet (if they have an online platform). Make sure you have all the required documents on hand, as well as extra copies so you won’t have to waste time going back and forth the Xerox shop. Also, do your best to make a good impression to increase your chances of approval. That means filing all the needed papers, attending the interviews on time, and what-not.

Wait for Approval

Then all that’s left would be waiting for the bank or lending company to review and approve your application. At this point, you can’t do anything other than wait. Things like improving your credit score, opening secondary credit cards, and reducing your debt-to-income ratio must be done prior to the application. So just keep your fingers crossed and wait for your loan application’s results.

Wrapping Up

As you can see, applying for a car loan can be pretty straightforward. By following this guide for car loans in the Philippines for first timers, you’ll be able to visit any bank or lending firm with more confidence and knowledge.