Truck Financing: What You Need to Know If Getting One

Trucks can carry bulks of products, materials, and objects of massive weight. These vehicles also serve as safe transportation for a group of people. Trucks have a lot of uses in businesses or personal affairs that owning one is worth investing in.

With truck financing, finally getting one is made possible and easier. Here’s what you need to know:

What is Truck Financing Loan?

Truck financing is a type of a secured personal loan granted by established financial institutions. It is similar to a car loan, except that the vehicle subjected to financing is, of course, a truck. There is a wide range of trucks available for this loan – from delivery trucks to personal transport services. But the most common types of trucks approved are those for commercial use such as closed van, ref truck, and 12 to 18 wheelers.

This type of loan is provided by various lenders, which is through banks, dealerships, or non-bank financial institutions. It enables you to get, use, and own the truck you want through an agreed term of repayment.

Like a traditional loan, you give your equally distributed monthly payment within a specified period. Application to this truck loan also follows the processes we are familiar with – such as financial profile assessment and documentary verification.

Benefits of Truck Financing

Here are some of the benefits of truck financing that you’ll enjoy:

  • When the loan payments are paid off, there’s no need to pay for the vehicle.
  • The truck can be sold or traded for a new one once the loan is cleared.
  • It helps you set up equity in the truck.
  • It can be a factor in having lower car insurance rates.
  • There’s no limit to the miles or distance you can travel.
  • Depending on the agreement with your financier, the vehicle is allowed to go modification.

Who can apply for Truck Financing?

Generally, interested applicants should meet the following qualifications:

  • Filipino citizen or legal resident in the Philippines
  • Between 21 to 65 years of age upon the loan maturity
  • Can present proof of income (if employed) or proof of revenue (if self-employed)
  • OFWs, seafarers, and foreigners should have a guarantor or co-maker to be an eligible applicant
  • Existing business should have been operating for at least a year in the industry of logistics, hauling, construction, etc.

Collect these documents needed for submission

When you deem yourself eligible, the next question is: what are the documents needed for your application? Check the list of requirements below.

For all applicants, you need to submit:

  • Proof of your identity – this refers to valid government-issued ID that include UMID, PRC ID, passport, or driver’s license.
  • Proof of billing – this should be the latest one and hold borrower’s name

For those who are employed, additional documents needed are:

  • Proof of income – this refers to your most recent ITR (Income Tax Return), duly stamped BIR Form 2316, or payslips for the past three (3) months.
  • Certificate of Employment – (should be latest and include your compensations).

For OFWs and Seafarers, the documents required are:

  • Proof of Remittance – these should be the most recent allotment slips covering three (3)months.
  • Employment Contract (for OFWs) – must be duly authenticated by the Philippine Consulate
  • Crew Contract (for seaman/seafarer) – should be the latest one

For applicants who are entrepreneurs or self-employed:

  • Certificate of Business Registration – DTI-issued for a sole proprietorship or SEC-issued for partnership and corporation
  • Updated ITR (Income Tax Return) or duly stamped BIR Form 2316
  • Updated Audited Financial Statement, SALN (Statement of Assets and Liabilities), or Statement of Income and Expenses.
  • Bank Statement or photocopy of Passbook – should cover the last three months
  • Other Proof of Income – these include a certificate of deposits, proof of investments, lease contracts, receivables, etc.

Note: Requirements may vary from one lender to another.

Tips on Applying for Truck Financing

For smart ways of getting truck loans, consider these tips:

  • Many lenders will immediately present their loan products, which seem to be rewarding, but do not immediately sign on a contract with the initial offers out of excitement. Research on the most trusted lenders of this loan and compare their offers. Match their offers to your needs and financial capabilities.
  • As mentioned, assess your debt history and habit. Look at how this will impact your application or what changes it will bring to your present financial status. Do you really need this truck loan? Can you afford to pay the monthly dues?
  • Secure your sources of income and create a goal plan on how to repay it. Make sure you have a job or a business that can support you before, during, and after the loan process.
  • Fast-track your application by submitting complete and accurate documents. Always get in touch with the loan personnel to keep the process smooth.
  • Keep the terms as short as possible. If you can afford it, do not prolong your repayment plans as longer terms incur a sum of higher interest in the long run. Ways like applying with a bigger down payment and paying the involved extra fees or taxes with cash will keep your dues from ballooning.