It’s an unusual circumstance that individuals be denied car loans in the Philippines when they fail the requirements. Despite this setback, there are other options to be opted for though. It is possible to get an alternative car loan if denied.
For individuals with more than enough income getting a car loan through bank financing has a great chance of approval. But for those will only enough income who want to buy a new car but have problems with requirements, could be rejected. If this happens and bank financing does not pan out, some remedies are possible to correct this dire situation. But, we should know how to get an alternative car loan and what circumstances lead to it. Here they are, for your information and they are classified from minor to major disqualifications that lead to a rejected car loan.
It’s an unusual circumstance that individuals be denied car loans in the Philippines when they fail the requirements
1. Instances of proven fraud by applicants who falsify their documents and are caught red-handed. Some individuals would attempt to doctor their records, but credit investigators and banks are very thorough in assessing the loan borrower.
2. All borrowers must have a stable employment record and should be able to prove their references are legitimate. Officials requirements state that applicants must have at least two years of employment or better, but another is having been in the employ of the company for one year. This can be confusing so clarifying this with the loan officer is needed before taking the loan out!
3. Borrowers could not get more than they can pay back to the bank loan. Should the stated income be less than the loan, it will be rejected so consider how much is commensurate. A worst-case scenario is a rejection will cause havoc on anyone’s credit rating, and it can’t be good at all.
4. The one taking the loan is not twenty-one years old and above the sixty-five-age limit when the loan is applied for. Anyone between these ages can apply but must meet requirements needed for bank financing. Consider this before attempting application for a car loan because this is a basic rule, no ifs or buts about it.
5. Even if a longtime resident of the Philippines, a foreigner cannot apply for bank loan financing. Only a true-blue Filipino citizen can apply with at least twenty years of age when doing it. Most of the time; the Filipino spouses act as a proxy for them but still subject to other requirements. Rejection is still a possibility though unless all papers are in their name, not the foreign spouse.
If all these requirements are complied with during the stage of loan application, then rejection will not happen. But it isn’t the end of the world because there are other loan alternatives to consider.
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1. Steps to take before trying out an alternative car loan
Yes, there are alternatives but will approval come about and is it guaranteed? The answer is no, and some steps need to be taken to make sure rejection isn’t the result! Steps that will help to apply for an alternative car loan if denied. It isn’t fool-proof but can help a lot!
Step#1: Loan rejection happens because of bad credit, repossession of cars or any property to repay any loan debt. If loaning to buy a new car or second-hand car and the records aren’t set clean, the result is definite. Better pay all debts due to credit and other arrears before attempting any car loans in the meantime.
Better pay all debts due to credit and other arrears before attempting any car loans in the meantime
Step#2: When all debt is settled and back to zero, lay low and save for the down payment. Never heap everything on any loan; you’ll pay more and bad credit records will have higher premiums. Keep all credit clean and maintain any card with lower charges.
Step#3: Do the research and get what is payable and is light on the finances, which is smarter to do. Know everything about the loan to be applied for.
Step#4: Be open about past credit history and avoid shenanigans which worsen an already pocked record. Got the straight and narrow which will lead to better credit and lower premiums.
Go about these steps and move on to the desired alternative auto loan. Remember some auto loan isn’t loan financing by banks and to know the details is important.
2. Alternative car financing options in the Philippines
So, now all the steps to clean your credit and other loans, also no loans of any kind has been applied for. An improved credit record will be better chances because some institutions aren’t strict and tight-fisted as banks! Here are the non-bank financing alternatives for auto loans.
2.1. Cars loans via credit card
This can only be done with a high credit limit, although it can be arranged by car dealers but will need further approval. The only catch is that some fees will be heaped on and they won’t be cheap! Once the approval is given; then your dream car is at your fingertips! Car loans through banks are flexible, but some cards have zero interest in a fixed period that is helpful to the buyer.
This can only be done with a high credit limit, although it can be arranged by car dealers but will need further approval
2.2. Cooperative or credit unions
If you’re looking for bank-like rates, this is the one to go for! But, the best thing is that your improved credit record will be faster processing of the loans. Most banks will go through like a fine-toothed comb, but these organizations will have better chances of approval. If your credit is in shambles; then try this out to get an alternative car loan if denied.
2.3. Car lease
It works by having a lender buy the car and leases it to the borrower for an agreed period. All payments should be given back completely without late payments, plus the borrower is responsible for the upkeep of it! When the period has ended there are multiples options; like return it but after the monthly payment, consider it first. Another option is to refinance it again, till fully paid which is the better choice than returning it. Or to buy out the remaining balance, should finances allow make it possible. One advantage of a car lease is that the lender is not the owner, and transfer of ownership can be done when fully settled.
One advantage of a car lease is that the lender is not the owner, and transfer of ownership can be done when fully settled
2.4. Car loans via car dealership
Car buyers can buy cars using these loans; provided by car dealers to finance loans given to interested customers. Best tip for this option is that dealers want to sell for more profits and commissions for the benefit of both, with faster loan approval too! It’s a win-win if you want a car, but the interest and hidden charges are like speed bumps. If this option is okay with the higher interest rates, it’s a go-go all the way.
Are these options acceptable to get an alternative car loan if denied acceptable with their terms, it is all up to the buyer in the end.
Car buyers can buy cars using these loans; provided by car dealers to finance loans given to interested customers
3. How to get an alternative car loan in the Philippines: Conclusion
Car loans in the Philippines aren’t simple and need some clarity provided for the ins and outs, especially getting denied and having your credit history marred by it. Acquiring other options to get an alternative car loan if denied will benefit buyers with this experience. These alternatives have their pros and cons so better to look out for it though. Car ownership is very vital for everyday life and makes it more convenient when moving about. Go over the ins and outs find what suits you most for your budget and advantage in getting a loan besides bank financing.
Don't forget to visit Philkotse.com to get more tricks on car buying, selling, maintenance and safe driving.
Norjan Ismail Abbas
Norjan enjoys writing about various topics, and car is among them. Don't ever ask him which his most favorite car is since he has none. He believes each car is beautiful in its own way.