car financingI have previously posted a very useful tip regarding car loan without taking your car last week and I have enumerated the different procedures and mechanics in applying for the OR CR loan in the Philippines using you car title. Now, I would like to shed light based from a 2-year old experience being a top loan consultant for the lending companies I am duly accredited with. I am looking forward to tell the story in a manner that will help borrowers and future loan assistance clients understand all about car financing and the different secrets and factors affecting approval rate. If you think that the tips I have posted on this article have helped you in a way on your way to apply for an auto loan, please don’t forget to like my page about loans in the Philippines or share this post in your Facebook, Twitter and other social media dashboard.

After carefully recalling all the experiences I have been through in the past 2 years of being a certified loan consultant with regards to loan application requirements, I came up with 5 compelling and important tips on how to make your car financing loan approval rate higher than you think.

Top 5 Factors for Higher Car Financing Loan Approval Rate

  1. Declaration of Expenses – In case you didn’t know, most lending companies whether you are applying for a collateral loan or non-collateral loan will require you to fill up an expenses data sheet. If not, then disregard this part of the tip. Otherwise, to help you realize how important it is that a capacity to pay is being computed and estimated, a borrower’s list of monthly expenses will most likely be a source of determining factor. While many of us thought that “the bigger the expenses, the bigger the capacity to pay is” is right, you could be left with a declined loan application believing so. The simple explanation here is that if you spend more than or high enough in your monthly expenses compared to your income or a combined income with a spouse, then, your capacity to pay for a loan will definitely diminish. This decline will cause you to get disapproved of your car financing application in the end. To remedy this problem, avoid declaring too much costly expenses that your loan application account interviewer will not know of unless you disclose them. What are these types of expenses? This can be education allowances, food allowances and all other miscellaneous expenditures. Try to project having a simple life with a convincing income source enough to pay for the loan you are looking to get approved of in your application.
  2. Source of Income – While many borrowers had limited to no income as initially thought, as a loan consultant, I have helped countless clients get a source of income even without the need to spend too much money to prove it. Furthermore, a source of income can come from sources you never thought possible unless your agent knows about it. And what bigger chances of approval rate you could come up because you are lucky today that I know it and I can help you with it if you allow me to. So here are the different sources of income that is acceptable by standards of different lending companies (may not be all) and private financing firms in the Philippines today – BUSINESS, REMITTANCE, PROPERTY FOR RENT, VOUCHER from FREELANCE and ONLINE WORK and REGULAR EMPLOYMENT.  Those of you who have a problem with using an existing business as a source of income with the absence of a DTI permit for a single proprietorship negosyo, then fear not. Application of a DTI business permit has been made easier than you think and less costly today. 200 pesos is all it takes to get a legitimate small business going for such permit. Add a barangay business permit and you’re good to go!
  3. Providing A Co-Borrower – While it is a rare case to ever need to use this privilege that very few loan applicants know they have, it is a good choice if you really can’t provide a convincingly stable source of income. All you have to do is to make sure to choose only he or she who had a good and credible enough amount of earnings from his or her source of income. The best choice in this case is that who had a business or job generating more than what is required of the borrower to pay for a monthly loan amortization to the lending company. This monthly loan payment will come from a computed figure based from the loan amount request of the borrower.
  4. Bank Statement – Lending companies and yes, even banks love it when they see a very old account on hand that has a moving cash flow convincing enough that the loan borrower had a stead streamline source of income. This is true in cases where a remittance from abroad is the income source of the loan applicant as well as those who had a business going but does not have so much document to prove it.
  5. Contract of Lease – A good agent always knows how to use and what to use when it comes to providing a good and convincing regular source of income. What better source can be had than a property for lease or rent. This is a steady streamline source of income too and believe it or not, if you have this and your only problem is that you can’t provide a duly notarized contract of lease, then let me help you with it and let’s proceed with your application and have it approved in no time. Just state your case and I’ll give you the necessary things and procedures to do to come up with an easy as pie source of income out of your property.

Now that you know the 5 major factors affecting your approval rate for a car financing application, let me say it straight to you regarding this topic that today, many things have already changed. Auto financing application is easy to get approved with banks. All you have to have is a regular job enough to pay for the car and you’re good to go.

I even talked to a client who had a 2013 model Mitsubishi Mirage just today as the writing of this post that she had been approved of a literally zero downpayment car financing loan with BDO bank. Although this doesn’t confirm it, I believe that there is a big chance that it is true for the simple reason that she has just paid since September 2013 and it’s just December of the same month and my client is already looking to apply for a car refinancing. It only means one thing – she doesn’t have the money to pay for the car loan anymore. Sadly, with a car refinancing loan with my providers, you can only qualify if you have already paid at least 70% – 80% of the total principal amount of the loan including a downpayment. When I asked her, I was surprised to have been told that she wasn’t required by the financing bank for a downpayment which means she got approved of a zero down car financing loan.