Getting Started On A Car Loan in the Philippines
A car loan is the most convenient way to obtain a new car without having to shell out huge amounts of cash from your savings. For those who can afford to pay for a new car upfront, it would still be wise to take out a car loan, and invest the cash for some income.
So how does car loan works in the Philippines and what are usual requirements and terms given to any buyer who wanted to have a new car. We’ve listed some of the really useful and practical tips and information that will help you to make an informed decision into buying your new vehicle.
Your Financial Records
Your personal banking and financial history serves as a virtual “credit score” or report card. This history can affect a person’s ability to obtain a loan.
Make sure you self-assess your financial capacity and see if you could spare a certain amount of money from your monthly income in case you finally have a car loan to pay. Self-assessment is an important step to helping you figure out if you can fulfill the responsibilities of paying for a car loan.
The banks need to see that you have enough income coming in on a regular or monthly basis in order to pay for the loan. Otherwise, your request will be rejected.
Big deposit, less interest
If you can pay a higher deposit, do so as it can significantly lessen your interest charges over the loan period.
Banks and other financiers in the Philippines would usually ask for these standard requirements upon receipt of your loan application. The requirements may differ slightly from person to person and based on your employment status.
- Two valid ID’s, government issued (passport, SSS, PRC, driver’s license)
- Latest three (3) months bank statement
- Income Tax Return (I.T.R.)
- Employment Certification
- Co-maker or guarantor
- Latest billing statement (Electrical bill, Telephone bill, credit card bill)
- Two valid ID’s government issued (passport, SSS, PRC, driver’s license)
- Business Permit (with DTI registration)
- Latest three months bank statement
- Income Tax Return (ITR)
- Latest billing statement (electrical bill, credit card, telephone bill)
Overseas Filipino Worker’s (OFW)
- Two valid ID’s (passport, SSS, PRC, driver’s license)
- Contract of Employment
- Latest three months proof of remittance
- Co-maker or guarantor
- Special Power of Attorney (SPA)
Additional requirements may be requested along the lines of the documents above.
Compare Your Options
Remember to do your homework and compare different banks, their rates, and interest fees before signing that car loan agreement. A small reduction in interest rates can go a long way and save you a fair sum of money over the loan period. You might also want to know more about general pros and cons of car loans.