Why Should I Apply for a Car Loan?
Many Filipinos dream of having their own car. In fact, according to NEDA’s Ambisyon Natin 2040* , 77 percent of Filipino families prefer to have their own vehicles instead of relying on good public transportation. What's more, they consider having their own car as a means to travel, which is considered a leisure activity in itself.
Applying for a car loan is simply just borrowing money to purchase a vehicle. The Consumer Act of the Philippines protects the lender and the borrower in these said transactions, and under this law, the lender is required to provide and give the auto loan amount depending on the provisions of their contract.
On the other hand, the borrower should pay the monthly payments depending upon their due date. Failure to do so for three consecutive months will result to car repossession and heavy penalty charges.
Top reasons why you should apply for a car loan:
It allows you to buy a car faster
Those who are afraid to take out a car loan can opt to pay the entire amount It will take a long time to save for that, unless you already have the money with you or you can come up with that amount within a short period of time. However, the average, middle-class Filipino earns only enough to support himself, and if he or she earns more, then chances are that they have families to support financially as well.
Getting a car loan makes financial burdens more bearable, since you're only paying a small amount of the total vehicle price each month. In other words, you're spreading the total cost over a longer period of time, making it easier for you to pay for your car.
You have a better chance of getting your auto loans approved
Do you have bad credit problems? Then you might think it's impossible to get a car loan. Actually, you still can, but we have to warn you that it won't be easy. Generally, in-house financing is easier compared to getting a standard bank loan anywhere, and many dealers are much more lenient in helping you out. This is not the case for everyone though, but it won't hurt to ask.
You know exactly what you pay for each month
When you get a secured car loan, your monthly amortizations remain fixed for the entire duration of your loan. You don't have to worry how much (or how little) you're going to pay each month, and you won't have to worry that your repayments will increase if interest rates go up.
You get some added perks
If you like anything that’s free, then this will sound music to your ears. When you get a car loan, then chances are you might enjoy added perks or freebies when you borrow from the same company that provides you the vehcile loan. For example, they might give you a free road tax for a year or an entire vehicular inspection before you take your car for a spin.
Before you get a car loan…
There are many benefits to getting a car loan. However, make sure to sit down and assess if your lifestyle, income, and personality can support this decision. You should never wake up one day and regret getting it in the first place. Ask yourself the following questions:
- Are you willing to change a bit of your lifestyle to pay for your monthly amortization? You might have to give up some of your habits (like drinking Starbucks each day or getting a spa every week) to pay for your car.
- Are you disciplined enough--and committed enough--to pay your monthly fees for a long time? Remember that missed payments will add up to interest rate charges, so it's important not to skip a due date.
- Is your income stable? Do you have enough of it to pay not just for the car, but for your other expenses as well? What's more, are you still able to save enough money on the side even when you pay for them? If you think you won't have enough money left--or all of your money will go to your expenses alone--then getting a car loan might not be right for you. Be realistic, and do the Math first.
*This report uses public consultation, national survey, and technical studies to create the primary vision of middle class Filipinos for themselves and the country over the long term.