How can you apply for a car mortgage?
- Check if you meet the qualifications
- Choose the car you want to own
- Decide between a bank or dealer financing
- Plan your loan term
- Compare loan rates
- Complete car mortgage requirements
- File your application
A car mortgage application in the Philippines may not be something you’re familiar with. Aside from the requirements, you would also have to consider whether or not you’re eligible for a loan.
Before starting things off, it would be in your best interest to understand that a car mortgage simply refers to a personal loan that allows you to conduct monthly payments on your vehicle. Instead of having to pay the price of the car in full, a car mortgage allows you to divide the scheduled payments into manageable sections.
As with any type of mortgage, it’s important for you to determine whether you’re financially capable of paying it off. Continue reading to learn more about the basics of applying for a car mortgage.
Check If You Meet The Qualifications
Checking if you are eligible for a car loan is perhaps the most essential step on this list. Ineligibility not only renders all your efforts moot but can also potentially waste your time.
In the Philippines, you can be eligible for a car mortgage if you’re a Filipino citizen who is at least 21 years of age (not older than 65 years upon maturity of the loan). If you’re an OFW, you can be qualified provided that you present a document that shows you have dutifully accomplished your monthly remittances. You might need to present a contract if you’re a seaman.
Aside from the ones already mentioned, you would also need to be earning a monthly household income of around PHP 30,000 to PHP 50,000. You would have to be working for at least two years based on your Certificate of Employment.
You can be more easily pre-qualified if you also have a good credit rating. Simply ensure you’re diligently paying off your credit card debts as well as other bills on time.
Choose The Car You Want To Own
Once you have established your eligibility for a car mortgage, you now have the freedom to decide on which car you would want to own.
Deciding on a car not only depends on the vehicle’s aesthetic appeal but most importantly, its practicality. For example, if you’re mostly living alone, a good type of vehicle you might want to consider is a small hatchback sedan or a compact car. On the other hand, if you’re living with a family, a great choice would be a mini-SUV or an SUV.
Conduct your research by checking out flyers and leaflets from various car dealerships in the country. This not only allows you to equip yourself with information on the different features of a vehicle but also allows you to compare the price points of each car.
Decide Between A Bank Or Dealer Financing
In this step, you would have to choose whether to go down the track of bank financing or dealer financing.
Choosing bank financing is a good idea if you have an already-established good credit rating. However, banks are generally more stringent when it comes to eligibility requirements on car mortgages. This means you have to meet certain criteria before getting approved for a loan.
In dealer financing, representatives from car dealerships do most of the paperwork for you. They’ll be the ones to submit your requirements to various lenders. Once your car mortgage has been approved in this type of arrangement, you have the flexibility to negotiate the terms of the offer, unlike in bank financing.
Whatever you decide, a piece of advice would be to weigh out the pros and cons of each option.
Plan Your Loan Term
Car mortgage terms in the Philippines usually come in either a three-year term or a five-year term. Whichever you end up choosing, make sure you consider several financial factors such as the ability to make timely payments as well as financial capabilities.
Compare Loan Rates
As with many decisions you may make on a daily basis, it’s important for you to be able to shop around for the best loan rates. Some lenders may offer you discounts on their interest rates. The market is highly competitive, so ensure that you’re conducting due research.
When it comes to comparing mortgage rates, consider the interest rate, the amount of the loan, downpayment, as well as the different terms of payments of each lender.
There are many online resources and tools which can easily help you compare the different loan rates offered by various lenders. Ensure you’re meticulously assessing the advantages which each lender can offer you.
Complete Car Mortgage Requirements
Now that you’ve potentially chosen your lender, it’s time for you to compile all the necessary documents before you begin filing your car mortgage application.
You would need to have both original photocopies of any valid government I.D. such as a passport, driver’s license, SSS, UMID, and so forth.
As mentioned before, you would also need to present a Certificate of Employment processed by your current employer. It’s best if you also have a copy of your payslip as well as an Income Tax Return if you’re a local employee and proof of remittance if you’re an OFW.
File Your Application
Depending on which type of mortgage arrangement you have chosen, the next and last step would be for you to file your application through walk-in or online avenues.
Always ensure to double-check your requirements and other pertinent documents before submitting them, for your convenience.
Applying for a car mortgage application in the country can be daunting if you don’t know where to begin. The best piece of advice for you would be to take it one step at a time and consider all your possible mortgage options.
The guide above has hopefully walked you through the motions of applying for a car mortgage. Always make sure that you meet all the requirements as well as have the availability of the documents in order to make your options more accessible for you.
Click here to apply for a car loan with Asialink Finance!