Owning a four-wheeled model is everyone’s dream. However, not all are fortunate enough to buy the car of their choice. Thankfully, easy credit is one of the big drivers behind the explosive growth in sales in the current auto industry and simultaneously helps budget-conscious car buyers get your dream car more effortlessly.
Apply for a car loan helps budget-conscious car buyers get their dream car more effortlessly
Taking out a car loan is now a bed of roses when banks are more willingly lending out money with more flexible terms and payments. However, for the first-time purchaser, seeking for best car loans in the Philippines can be a daunting task.
1. How to get approved for a car loan in the Philippines
Before applying for an auto loan, make sure you – a resident of the Philippines can meet the following requirements:
- Age: 21 - 65 years old
- Minimum monthly household or family income ranging from P30,000 to P50,000
- For Overseas Filipino Workers (OFWs), the beneficiary must be a resident of the Philippines.
- You have to be a regular employee for at least 2 years.
Meet all those minimum requirements? Now, come to the dealer to take home your dream car.
In our country, most car dealerships go into partnership with a bank
In the Philippines, most car dealerships go into partnership with a bank while some have their own financing arm. "In-house" financing (obtaining car loan at car dealerships) guarantees easy processing, fast approval, free registration, chattel mortgage and insurance as well. Occasionally, you can gain promos like zero-percent interest (for one-year periods only), low-down-payment schemes, or straight monetary discounts.
Anyhow, car dealers still need to make money, so opting for in-house financing normally costs 4 - 5% more than bank loans. In fact, bank loans always offer better rates. Sometimes, this amount is waived for the benefit of first-time buyers. Therefore, just limit your choice to something inexpensive, an Alto or Mirage for example.
Even with a quite low salary, you can get through a car loan in the Philippines with a monthly payment of under P10,000. Additionally, paying a one-month advance can help you save some of your hard-earned money.
>>> Besides car loan, car insurance is also a major concern of Filipino car buyers. Click here for a thorough guide on car insurance in the Philippines.
2. How to compute chattel mortgage fee?
Chattel mortgage is also a type of car financing in the Philippines. Chattel mortgage fee is what you pay the bank in exchange for taking out a secured loan. Most car loans in the Philippines are secured, that is to say if you miss a certain number of monthly payments, the bank has the right to repossess your vehicle. Once you completely repay the loan and interest rate, the mortgage will be cancelled.
Chattel mortgage is also a type of car financing in the Philippines
Normally, you can also avail a myriad of balloon or residual value options ranging from 0 - 60%. The value is determined by on kind and condition of your vehicle.
3. Best banks for auto loan in the Philippines
Have a look at the list of leading banks offering car loan in the Philippines with lowest interest rate.
|Bank Name||Interest Rate (% per year)||Effective interest rate (% per year)||Total Interest Over Loan Period||Monthly Repayment|
As you can see from the table, Metrobank is one of the banks having lowest interest rates this year. Click here to learn more about Metrobank car loan promo 2018.
Metrobank is one the the banks having lowest interest rates this year
After having compared offers from those banks, apply at your chosen one by submitting the necessary car loan requirements that can be found on its official website. Generally, documents needed include:
- An accomplished application form;
- 1 - 2 valid IDs or a copy of your IDs;
- Income documents depending on your employment status.
As usual, processing time is within one banking day and additional documents will be submitted after approval.
In the end, we want to jog your mind that never underestimate the importance of promos, but you have to crack the numbers to decide whether they're worth it.
In addition, if you don't mind shop for a second-hand model, you can find some great deals on repossessed cars at the bank foreclosure lots. Better still, you can also inquire about bank financing on the spot.
Wish you to find your best car and best auto loan in the Philippines with some advices from Philkotse.com!
- What you need to know before getting a car loan Feb 01, 2020
- What you need to know about car loans in the Philippines Oct 28, 2019
- 8 Things to Consider to Get a Car Loan in the Philippines Oct 12, 2018