Jenny
With prices for brand new cars in the Philippines skyrocketing at an alarming rate, would-be Filipino drivers are starting to look to the used car market to acquire their own set of wheels. Even so, purchasing a pre-loved car is quite challenging, especially if you’re financially constrained. Luckily, you have the option of getting a second hand car on finance now-a-days.
Reasons to Apply for a Car Loan
Filipinos have various reasons why they rely on used car auto loans when purchasing vehicles. Below are three of the best ones.
To Accelerate the Buying Process
Chances are, you’re an average middle-class Pinoy whose earnings are only enough for yourself and your loved ones. Therefore, paying for a vehicle in full, even a second hand one, will involve you saving money for quite a long time. By taking out a car loan, however, you’ll be able to speed things up.
To Better Manage the Cost
Getting an auto loan to buy a secondhand car will also make paying for it much more bearable. The best lending facilities will provide you fixed monthly amortizations, allowing you to plan your money budget more definitely and relieve you of the worry that the interest rates might spike.
To Enjoy a Few Perks
Another great reason why you should consider taking out an auto loan is because some of them come with bonuses. Banks, lending firms, and car dealerships dish out freebies and other perks with their lending facilities to attract as many clients as they can. If you like free stuff, you would do well to take advantage of such generosity.
Steps to Get Used Car Financing
If you’ve already decided to get car financing but don’t know how, you can try following the directions down here.
Decide on the Car You Want
First things first, you need to make up your mind about the vehicle you want to own. If you want to buy your dream car, then you need to think about a couple of questions. One, can you afford it? And two, is a second hand unit of it available?
Choose the Loan Provider
Next, you need to decide whether you’re getting financing from your trusted bank or from the car dealers. Both can provide low interest auto loans with lots of perks. However, if you have poor credit history, then you might fare better with dealerships since they tend to be more lenient in that regard.
Pick the Loan Term
Then you need to choose the right loan term for you. Auto loans typically come in 3- to 5-year terms, with some dealerships even stretching it as long as 10. Just think about your financial capacity, and keep in mind that the longer the term, the more interests and additional costs you need to shoulder.
Compare Loan Products
Also, it’s a good idea to check out more than one auto loan product. Comparing rates and packages when shopping for lending facilities allows you to get a better picture of your financial options when buying a car. It can even be considered fun, since some money lenders tend to give out freebies even if you don’t sign up with them.
Apply for the Auto Loan
Once you’ve decided on the car you want, as well as picked your preferred car loan package, you can proceed with the application itself. Go to the loan provider with all the necessary documents and requirements and submit your request. From there, all you have to do is wait for their approval.
Read the Terms Thoroughly
Should your loan application get approval, the next thing to do would be to read the terms and conditions of the auto loan thoroughly before signing. Doing so would help you clarify your agreement with the lender, as well as avoid issues like hidden charges. Don’t be afraid to ask questions if there’s any part of the contract that you’re having trouble understanding.
Select Mode of Payment
Lastly, you need to pick the the most convenient payment method. This will make the repayment process a whole lot easier for you, as well as reduce your chances of missing due dates and incurring penalties.
Tips to Ensure Auto Financing Approval
Applying for car financing to buy that secondhand car you’ve been dreaming about is one thing, and getting it okayed is another. To boost your chances of getting the go signal, best follow the tips listed here.
Have a Bank Account
Having a decent bank account shows that you are financially capable of taking out and paying for an auto loan. If you don’t have a bank account yet, then now’s the perfect time to open one.
Maintain a Good Credit History
Credit history is a significant factor considered by lenders when reviewing loan applications, particularly by banks and big financial institutions. The higher your credit score is, the more likely you’ll get okayed. If you want the best used car loans available, you need to have a pristine credit history.
Be a Regular Employee Prior to Application
Applicants who are employed for at least 2 years are also more likely to get their loans approved than those who only started on their companies mere months in. That’s because lenders want borrowers to have a stable source of income. Thus, you need to avoid switching jobs prior to your car loan application.
Obtain All Necessary Documents
No need to expound on this further, but you need to have all the necessary documents and requirements on hand prior to your appointment with the loan provider. Incomplete requirements can greatly reduce the chances of your loan getting approved.
Get Advice
One more thing, ask help from people who previously applied and got approved. In case you know someone, then phone them before going to the lender. Also, you can check out reviews and testimonials about the loan provider online.
Conclusion
As you can see, getting a car on finance is a great way for you to purchase a second hand ride. By following the steps and tips listed above, you can rest assured that you’ll get your dream car in no time.