18 Dec

Tips to Negotiate a Car Loan Deal in Philippines

Published by Azim - Categories: #Car Loan

For many of us, buying a car is an exciting experience. The entire process of buying a car calls for deep scrutiny of various aspects before buying one. The Philippine car market is a vibrant one with a plethora of options to choose from. Sedans, Hatchback, SUVs and much more. In most cases, the quest to get hands on your favorite four wheeler is financed by a loan. An Auto Loan is one of the most sought after finance options in the Philippines to buy a car. A large number of indigenous and multinational banks offer Car Loans as a part of their retail lending portfolio.

Before jumping into a loan product just because they offer the lowest interest rates, think again. There are other factors you need to think about before signing up for a loan. Read the complete literature and make a wise decision. Auto loans in the Philippines are offered mostly on an unsecured basis. You may also find some which offer loan after provision of a collateral.

Lets look some of the most critical aspects of negotiating the best car loan deal. After all, it's your hard earned money and dream car in question.

Lookout for Promo & Exclusive Offers

You may be eligible for an enhanced scheme outside the standard car loan a bank has to offer based on your background and profession. Do not forget to inquire with the representatives after appraising them about about your background and ask if they have a better deal for you. Most of the banks and financial institutions also run festive and promo offers during which the terms and rates offered are lower than the standard offer.

Talk About A Lower Rate of Interest

The most critical factor. Go ahead and negotiate for a lower rate of interest before concluding the deal. The published rates by banks may not be final and binding. There is always a room for getting a better deal. Based upon the make and the model of the car, banks offer exclusive rates in accordance with tie up with makers and dealerships. Do not forget to check with available sources that can get you a lower rate of interest.

Choose The Loan Tenor Carefully

Once frozen and the contract is signed, the loan tenor cannot be altered. This is the period over which you make EMI(Equated Monthly Installment) payments to clear the loan amount along with applicable interest charges. Lenders offer flexible tenure options ranging from 6 months to about 4-5 years. Choose the most optimum once based on the repayment capacity.

Always remember, a longer term means interest charges paid are higher. On the contrary, short term loans implies you pay bigger amortization each month. Ascertain your monthly income and expenses and get a term that fits the bill.

Time To Discuss the Fees & Charges

After settling the above, it's time to shift focus on the Fee component. Firstly ask for clear cut information on various misc. charges involved in the loan such as processing fees, stamp charges, late payment charges etc. Once you’ve these details, speak to the bank’s representative and see if they can waive or lower some of the fees such as processing fee, which can be quite a high amount. Usually, all fees are charged as a fixed percentage of the loan amount/outstanding balance.

There are many other aspects involved when we talk about getting a loan deal as per our satisfaction. It's probably as important as the process of selecting the car itself. The best way to prepare for a car loan is to read about the products offered by banks in Philippines. Use resources available on a neutral financial portal which provides unbiased and comprehensive information on various car loan offers in the country. You will also be able to find details of rates and fees, helping you in making quick decision on the products you would like to apply with.