Car Loans in the Philippines
As a young professional, you might not be earning enough money to propel your dream car out of the showroom and into your garage.
The cheapest car in the market today costs over five hundred thousand pesos and even if you have that amount in the bank, for sure you won’t attempt to spend it all on an urge. Do you know why? Simply because you’re now a responsible adult who’s got bills to pay and maybe even mouths to feed and a family who depends on you. The good thing is you can take advantage of a personal loan that can help you do monthly payments for a car instead of a one-time payment of the car’s full price. It would be easier to handle your finances that way.
How a car loan works in the Philippines
How a car loan works are pretty simple. It’s a financing arrangement in which the bank or a financial institution provides you a loan with a specific amount, so you can buy a car.
Then eventually, you will be paying the borrowed amount in a series of monthly payments over the duration or period of the loan, typically between 12 to 60 months. But other than paying the car loan amount, you’ll be also paying the interest.
The benefit of a car loan - is getting a car loan a good idea?
Yes! The major benefit of a car loan is that you get to own your dream car without paying the full price upfront. While paying in cash simply means receiving big discounts or not having to make extra payments for the interest since you don’t have to make a loan or borrow the required money, not all people have the means to afford this method of payment and a car loan comes in as a perfect answer.
Who becomes the owner of the car obtained through a car loan?
When you acquire a car through an auto loan/car loan, the bank or the lending company becomes the legal owner of the car since they have paid the majority of the car’s selling price.
You will eventually become the legal owner of the car once you have settled all your dues and obligations with the bank. Just consider, though, that within the duration of the loan agreement or contract, you must take proper care of the car, from repairs and maintenance including insurance.
With this in mind, you must be diligent and responsible enough to take off the car and make loan payments. Otherwise, you will run the risk of getting your car repossessed (or “hatak”) by the bank or the lending company.