The commute to the office and back can be as draining as working. It’s why many believe a car is becoming more of a necessity than a luxury.
Fortunately, getting your own car through auto loans is much easier now. Auto loan offerings have become more accessible, affordable, and much quicker to apply for. Online loans in the Philippines are also becoming more popular in the automotive industry, allowing you to borrow money from the comfort of your home.
The convenience and popularity don’t mean that an auto loan isn’t a serious purchase. It very much still is. Hence, it’s essential to understand more about it and how it can benefit you, especially if it’s the first loan you’re applying for.
What is an Auto Loan?
An auto loan is a secured loan lenders offer borrowers to purchase a new or used vehicle. Instead of paying the entire price of the car upfront, an auto loan allows you to pay it through monthly installments.
7 Key Benefits of Getting an Auto Loan
Not having to pay the full price of a car upfront is just one of the many auto loan benefits you could enjoy. Below are a few more advantages of an auto loan.
- Prevents you from providing additional collateral
An auto loan differs from other types of loans, such as a collateral loan, because the collateral is already built-in; the car itself already acts as the collateral. Although you may not yet have full ownership of the vehicle — defaulting on the monthly payments would mean repossession — you can still enjoy all the perks of having your own car.
- Has low interest rates
Since you won’t need to provide additional collateral, lenders can provide much lower interest rates than what’s offered with personal loans. The lower interest rates can mean that repaying the auto loan can be much easier.
- Helps establish good credit
When you’re able to pay your monthly amortizations, it reflects well on you as a borrower, improving your credit. Good credit will help you with your future car loan approvals since it means that banks and financing companies trust that you can repay them.
Good credit also allows you to borrow larger amounts, which can benefit you if you also plan to apply for a home loan, for example.
- Allows for future savings
Brand new cars can range from around P500,000 to above P5,000,000. Buying a car for that amount can put a significant dent in your finances.
Instead of paying the massive cost in one go, you can spread out the purchase of your car throughout multiple, much smaller monthly payments. The smaller payments allow you to set aside more of your monthly income for other savings and financial goals you may have.
Additionally, some financing companies offer 2nd hand car loans that allow you to buy used cars, which are much more affordable, meaning a much smaller loan amount.
- Allows for improved budgeting
Knowing that you have a monthly payment, such as your electric and water bills, makes budgeting much easier; it’s as if those expenses are already a given. Auto loan benefits work similarly. Knowing that you have a car payment by the end of the month makes it easier for you to set aside money and plan your spending around it.
- Near-instant utility
Among the many auto loan benefits is the ability to purchase a car much sooner than if you had to save up for it over a few months and years, which is what many Filipino families may do. An auto loan can be a viable option if you need a car urgently, such as getting to and from work.
- Lender-provided Freebies
Most lenders may include freebies with the auto loan. The freebies can include discounts for the car itself or a specific car brand. It can also be car accessories such as dashboard cameras and rain visors. These freebies add additional value to your auto loan.
Before You Hit the Road
Although applying for an auto loan is much easier now, it still requires careful planning and research. Before asking yourself, “Should I buy a car?” you need to understand whether or not you can afford one in the first place.
Owning a car in the Philippines has many expenses you need to account for, such as maintenance, gas, and the LTO registration once the auto loan is fully paid. Moreover, you’ll also need to consider if you can realistically make the monthly amortizations or if you’ll need to adjust your lifestyle because of it.
Once you’re confident in your finances, consider applying for your auto loan at Asialink Finance. As one of the Philippines’ leading finance companies, we offer you a wide array of convenient and accessible loans with competitive interest rates, making it easier to find the ideal loan.
Apply for a loan online today at Asialink Finance!