Get approved for a car loan now! Here's what you should do
Updated on February 23 2024
Are you planning to buy a car in 2022 through car financing? You are in the right place! We will discuss some essential information about auto loans to help you qualify for one. Aside from that, we will provide other recommendations to save more money in purchasing a vehicle. Are you excited? Alright, let’s dive right into it!
What is car financing?
Car financing is one of the most common ways to purchase an automobile, other than cash payments. It is done through banks or credit unions accredited by the car dealership store. Usually, borrowers will be required to submit documents as proof of identity and financial capacity. Once the background check is complete, you will get the result of the application. There are also instances wherein auto financing companies ask for additional requirements if the borrower had issues with the other documents. If the applicant can settle them, the bank can reconsider their application and eventually approve.
After that, successful applicants will undergo an orientation and contract signing. Usually, representatives from the company will assist the borrower on that day, explaining everything written in the contract. These include the length of payment, interest rate, consequences for late or unpaid monthly amortization, and other legal matters. You can ask questions and negotiate if you wish to change the terms. Be sure to remember the entire discussion to avoid facing charges in the future. Better yet, take down notes.
Who are qualified to avail of a car loan?
People who wish to borrow money for auto financing: must be a resident of the Philippines, have a regular source of income like a job or small business, and provide the necessary documents required by the bank or credit union.
Typically, applicants denied a car loan are those whose monthly income is lower than the amount required by the car financing company. For instance, an OFW who does not have a co-maker living in the Philippines will be denied. Those with bad credit history with other banks and lending entities will not get approval.
What are some tips to get approved for a car loan?
Although there are a lot of auto financing companies all over the country, not everyone has the same requirements. Some credit unions only ask for government-issued IDs and proof of income, while banks look for more documents to prove your financial capacity to pay the entire car loan. It is a must to do research or go to the nearest lender to know the details. Moreover, here are some useful tips that you can do to get approved for an auto loan.
1. Settle your debts
One of the main requirements to get approved for a car loan is good credit history. If you are a good payer, you have a high chance of borrowing money to buy your dream vehicle. But, if you have issues with other lending companies or perhaps unintentionally forgotten to pay a loan several years ago, make sure to settle your debts from them first before sending your car loan request. Failure to do this will give the bank an unfavorable impression of you. They might even deny your application after seeing outstanding payments.
On the other hand, avoid borrowing money to settle those accounts. It will only add to your unsettled debts, which can ultimately give you financial problems in the coming months. Instead, save some cash first by getting freelance jobs. You can start by selling your preloved items to get rid of those unnecessary things in your house while earning money at the same time. Doing so will certainly help aid your debts and even add some cash for the down payment of your dream automobile.
2. Have a steady source of income
Your salary is vital for a lender to approve your car loan request. It proves that you can pay your auto loan no matter what happens. Depending on your job title, you must provide your proof of income like three months of payslip and Certificate of Employment. Additional documents will be required for borrowers working outside the country or OFW and those with small businesses. As such, talk to your lender about your current work situation and give the necessary documents that you need to submit.
If your monthly income is insufficient for their requirement, look for a trusted co-maker and combine your earnings to meet the exact amount that the auto financer is looking for. You can also push back your car loan submission for a while and save money for a larger down payment. This way, your monthly amortization and length of payment will be lessened, making it easier to get that sweet auto loan approval.
3. Prove your identity
With all the bad news about online scams and identity thieves, car financing companies are now stricter in approving car loans. Government IDs may not be enough to prove your identity. You need to supply other documents as evidence that you are a real person, living in a real address.
Because of this, make sure to keep all your receipts from your water and electricity bills. These are solid proof of residency that you can use in submitting your car loan request. A driver’s license, lease or agreement, and bank statement can also act as evidence of your identity and residency. These documents are vital to the bank to know your location to contact you.
4. Give a large downpayment.
Giving a substantial down payment is one of the best ways that you can do to get approved for a car loan quickly. It is a win-win situation for you and the lender. You can buy your dream vehicle and pay for lower monthly amortization while the financer can lend you money while getting a profit margin at the same time.
Instead of purchasing your desired automobile in the usual 20% down payment or even getting into the zero down payment promotion by some car dealers, put down a more substantial amount for that car. This way, you will be able to get a loan at a lower interest rate and pay for it in a shorter term. You can save money and enjoy more years free of debt.
5. Consider buying repo cars.
While there is a stigma surrounding these cars, there are significant savings here. For one, these vehicles have a lower price tag. You can get something packed with better features against a brand-new car with basic ones at a similar price. Additionally, you can personalize a repo to make it more suitable for your needs. As a result, your automobile will look better without you spending so much money. And finally, you can get approved for a car loan if you get in touch with lending firms or used car dealers that can assist you. Despite the failure of the first owner to pay the loan, the bank still wants to get their investment back, even in a smaller profit. So, they will most likely let you have it as long as you can submit the requirements and place a decent down payment.
To ensure that you will get the best repo car in the market, go to a reputable car dealer like Automart.Ph! We offer a variety of models, ranging from small cars to larger trucks, all sold at a very competitive price. We also ensure the quality of our products by doing a thorough inspection to make sure that everything is working well before posting its availability on our website or social media pages. And hey! Great perks are waiting for our selected customers!
For more information, get in touch with us via call or send us a message on Facebook. You can also visit any of our store locations all over the Philippines to see the repo cars that we are selling personally. What are you waiting for? Call us now and take home your dream car!
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