Updated May 17, 2017
Nobody can deny the convenience having a car can bring in every Pinoy’s life. You can go to places anytime without worrying if there are still public vehicles to ride should you want to go home late. You can take your family on a road trip, have a long weekend in Tagaytay without the hassle of commute, or simply avoid the congested roads on your way to work.
With acquiring a car, only a few can pay in cash. Most people will get an auto loan such as UnionBank Auto Loan. Here are some questions you need to ask before deciding.
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Am I Eligible?
UnionBank Auto Loan Eligibility
For you to get a UnionBank Auto Loan, you must be at least 21 years old earning P50, 000 each month. If you are a foreigner, you must be married to a Filipino citizen. Though you may earn more than P50, 000, you must be a regular employee. Self-employed applicants must have a profitable business for 2 years.You need to firstly check the eligibility to avoid wasting your time and effort. If the eligibility does not fit you, you can consider other auto loans.
What are the Required Documents?
UnionBank Auto Loan Required Documents
Be sure to prepare all the needed documents. It is not only convenient, but it also shows that you are professional. If you are employed, you have to provide your COE, your latest ITR and a duly filled up application form. As for the self-employed individuals, they have to submit their Business Registration papers, ITR, trade references and the filled in application form. The required documents must be clear and readable. Also, prepare a clear photocopy of each document in case you’ll be asked for it.
Are the Interest Rates Affordable?
UnionBank Auto Loan Interest Rates
We all know that loans have interest rates, however, you should know that there is a difference between a Standard Installment Rate and the OMA (One month Advance) Installment Rate. The standard interest rate is charged if you pay your loan amortization on your due date. The OMA is charged if you pay 30 days before your first due date. There is usually around 1 to 2% difference between the two. It does seem small, but when applied on your loan you’ll be able to save up.
To give you an idea:
- Let’s say you want to buy a car worth P500, 000 and your downpayment is P100, 000.
- Your approved loan is P400, 000 to be paid in 36 months. Standard Interest rate is 17.33% while OMA is 16.36%.
- Monthly installment for Standard Interest rate is P13,037 x 36 months = P469,332
- Monthly Installment for OMA is P12,929 x 36 months = P 465,444
- You can save around P3,888 (Auto loan calculator may have a different loan calculation but it will still a show considerable savings)
When choosing an auto loan consider if you can responsibly handle the interest rate.
How much can I borrow?
UnionBank Auto Loan Amount
You can borrow at least P200,000 up to P5,000,000, but you are required to pay the downpayment of at least 20% of the car’s open market value. The higher the downpayment you pay in cash, the lower you will have to borrow. This means you’ll have lower interest to pay the bank.
Where can I Use It?
UnionBank Auto Loan Purpose
You can use the Unionbank Auto Loan for purchasing a brand new car, second-hand vehicles or brand new light trucks. Remember to ask the bank for any added fees should you want to buy a used car. Some banks charge for an appraisal fee.
How Long Can I have the Loan?
UnionBank Auto Loan Term
You can get a loan term from 12 to 60 months. Make sure that you consider which is the right tenure for your financial capability. The longer the term, the higher the interest rate. Though the monthly dues may seem smaller, you will be paying more in the long run. And the longer the term, the longer time you have to wait to apply for another loan from a bank. Consider this if you are also planning to get a housing loan.
How Do I Pay the Monthly Amortization?
UnionBank Auto Loan Payment Options
You can either pay through Auto-Debit Arrangement (ADA) or Post-Dated Checks (PDC). With ADA, the monthly dues will be automatically deducted from your bank account. As for the PDC, you will be asked for a minimum of 12 checks of your monthly amortization as the minimum loan term is 12 months.
Is there a Promo I can Avail?
A total of P10, 000 worth of free gas is given for brand new cars. You must have borrowed a minimum amount of P500, 000.00. Missing your payment will result in forfeiting the promo.
When you get an auto loan, consider its flexibility and your choices, not just the promo. Do not hesitate to ask questions as you will be paying your loan for a year or so. Also, clarify other fees and the conditions of penalties to avoid bill shock.
If you need a personal loan for a car maintenance or needed upgrades? The Unionbank Auto Loan will not fit your needs. Good thing you can get a quick cash loan from Cash Mart.