Ready to buy your new wheels?
When you were younger, or even perhaps now, you usually stare at sports cars which speeds up along the highway, right? You then ponder when you could possibly afford one. Well, thanks to the competitive market, banks have created affordable car loans. This is why your neighbor or relatives now suddenly owns a car.
Before you go car hunting though, you need to understand how the car financing works, unless you have enough savings to pay in cash. Yes, some Filipinos can afford to buy a car in cold cash. And we, one the other hand have other ways to buy ours.
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With car loan, such as the EastWest Bank’s, the bank will pay the certain percentage of the car’s market value. Then you have to pay monthly. Is it really that simple? Let’s take a look at EastWest bank Car Loan
Eligibility and Requirements
This car loan is offered to Filipino citizens at least 21 years old with a regular monthly income of P40, 000. If you are not earning such amount, but your spouse is also working, you can ask the bank if you can have a joint application. This way you can still have a chance to apply and get approved.
It will also be a great advantage if you have a good credit standing. What is a credit standing or credit report? It is the record of your past credits or debts from banks and other registered money lenders. The bank will depend on credit reports to evaluate your creditworthiness or ability to handle the loan diligently.
Of course, the bank will also check on your documents for added information on your finances. Let’s say you are employed with a salary of P45,000. Then you need to provide your Income Tax Return, bank statements, payslips, valid governments issued IDs and your marriage contract if you are married.
In case that you own a business, you need to prepare your business permits, recent bank statements and your valid Business Registration Certificate either from DTI or SEC.
Now, whether you are employed or self-employed make sure that all of the information are accurate and correct. They need to be consistent such as the address, contact number and your name. Usually, inconsistencies and lack of required documents will put your application on hold. This will also risk your application approval.
You also need to submit a properly filled in application form. Before you answer all the blanks, you need to consider certain things first. Are you going to buy a new car or a second hand? Well, EastWest Bank can finance both.
EastWest Bank Car Loan Interest Rate
Next, consider the loan term and the interest rate. Are you interested to pay of the car loan as soon as possible you can only afford to pay for five years? Shorter term has lower interest rate, but higher amortization amount. Longer term has interest rate as high as 32%, but the monthly repayment is way lower.
Once you have decided with the term, decide if you want to pay the first monthly amortization in One-Month Advance or Standard Rates. One-Month Advance has a bit lower interest rate. You need to pay the first monthly fee the day the loan is disbursed. If you opt for the standard rates, then you will pay the first amortization a month after the loan is released. The difference could just be 1% on interest rate but in the long run, you would want to save as much as you can if you have the chance.
Once your loan got approved, you need to make sure that you pay the exact amount each month. Like any other loans, missed payments will incur penalties. There are two ways to pay off the car loan, through Issuance of Post-Dated Checks (PDCs) and Automatic Debit Arrangement (ADA).
Other Fees to Settle Upon Loan Approval
Aside from the interest rate, there are other fees to settle in cash. You see, though there is a car loan, you still need to ensure that you have enough savings to pay certain fees upfront such as the LTO registration fee and downpayment. The higher the downpayment, the more you can save since you will apply for a lower loan.
Additionally, the bank will charge you processing fee, insurance premium and legal fees if applicable. Note that if you want to buy a used-car, you will have to pay for the appraisal fee.
Having a car loan is a major financial responsibility. You need to be financially prepared as it will take years to settle. Now, are you ready?