Current Interest Rates For Used Car Loans – Did you know that you can get a loan even when buying a used car? And although it may not be “flexible” compared to financing a new vehicle, they can still finish the job if you, your budget, and the car you want is the perfect partner.
There are many routes to using your used car – you can do this through bank loans or non-bank loans (third party finance companies). Alden Ray Ejorango, Head of the CARMUDI PHILIPPINES Loan Department, has given us some of the most common questions and answers – when getting a car loan. Here is a list of the top lists:
Current Interest Rates For Used Car Loans
Can you get a used car loan even if you have an existing loan, settled / paid elsewhere, such as a home loan or education?
Yes, you can get loans for banks and non-banks. Basically, they see your financial ability to pay not only the down payment, but the monthly payment of the vehicle you buy for the entire loan plus your capacity to pay for other existing loans.
What salary do you need to get a used car loan?
Generally, banks will approve your application if the monthly amortization of the car you buy is three times the total of your income. Note that this includes the monthly income of the first borrower and his partner or second borrower (or joint maker).
For example, a monthly amortization car of PHP15,000 requires you to have a salary of not less than PHP45,000. Monthly car payments of PHP25,000 means your salary must be around PHP75,000 or more; if it’s PHP 30,000, it should be PHP 90,000 and above.
On the other hand, non-banks, or third-party finance companies are not very strict compared to banks. In fact, some will even receive a lower than “mandatory” income or salary. The drawback, however, is that they use higher monthly interest rates compared to banks.
Can you get a used car loan even if you have an unpaid credit card bill or a loan that hasn’t been completed?
You might get a loan at a bank, even though you are required to have a good credit reputation when applying for a loan.
Moreover, banks not only see loans that have not yet been settled, but also for the current Replevin Case. This is a big red flag for them, and it’s very unlikely they will approve the application if they see this. However, they can approve a car loan if there are valid reasons for this – as is possible, the car under Replevin was car-napped a year ago so that monthly payments were stopped.
On the other hand, some non-bank banks or third-party finance companies approve car loans even if there are loans maturing somewhere.
What is the interest rate when getting a used car loan?
Interest rates for banks that offer a one to four year loan period are around .93 percent to 2 percent. There are even some who offer up to five years with interest of 0.46 percent per month.
Meanwhile, interest rates for non-banks offering a one-year to three-year loan term are at 1.25 percent to 1.30 percent.
How much does it cost to get a used car loan?
Banks and non-banks require a 30 percent down payment, a processing fee of up to 7 percent, plus insurance costs.
To give you an idea of how it works, here are the details of the car loan and the monthly amortization required, depending on the term. The unit price of the vehicle is PHP370,000, and the 30 percent down payment is PHP111,000. The amount to be financed (or borrowed) is PHP259,000.
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