Things to Do After You Settle Your Car Loan
So you’re done paying off that car loan. Good for you! But before you celebrate, you need to do a few things first. After all, the bank that gave you the loan still owns your sweet new ride. To fully own and enjoy your new car, take the following actions.
Check the Collateral Documents’ Availability
Usually you don’t have to do this as the bank that gave you the loan would automatically inform you of the collateral documents’ availability 10 to 15 days after you paid the last installment. But just in case you don’t hear from them after this time frame, call their customer service and ask them to confirm the payment you made and to verify the availability of the files.
Claim the Collateral Documents
Once you have confirmed the availability of your new car’s collateral documents, go to the bank where you applied for the loan, present your ID, and claim the following papers:
● Two copies of the Release of Chattel Mortgage form
● A promissory note for the Chattel Mortgage
● Original LTO Certificate of Registration – Encumbered (CRE) and its accompanying Official Receipt (OR)
You should also expect to pay fees to have the documents of your fully paid car loan notarized.
Cancel Your Chattel Mortgage
Next, you need to go to the Office of the Registry of Deeds (where your loan was registered) to have your chattel mortgage cancelled. The exact branch you need to go to would be found in the promissory note. There’s no need to bring your car with you; just submit the registration application form alongside other required documents, pay the fees, and wait for the process to get completed.
Remove the CR’s Encumbrance
hen head to the LTO branch indicated at the top portion of the car’s registration document to have its encumbrance nullified. An “encumbered” status implies that your new ride is still under financial obligation (i.e., the loan is still unsettled). You need to have this status changed once you’ve paid off your car loan payments. Only then would the car be truly yours.
Renew Your Car Insurance
Congratulations! You’re now the proud owner of a sweet four-wheel drive. The only thing left to do at this point would be to renew your car insurance. That way, you can financially protect yourself should you get into an accident or emergency.
The Takeaway
If you’ve just settled your car loan, you need to make sure you take these actions at once. By doing so, you’ll be able to own and enjoy your new ride sooner.
