replevin case court clearanceI’m never really sure if the same rules apply with banks when you apply for car loan when you want to buy a new vehicle but definitely, with Philippine lending companies, a replevin case will affect the loanable amount of a borrower should there be a court case. Please read a relevant case for information purposes regarding replevin and car loan here –

A quote from Philippine Law website state that “The applicant must also give a bond, executed to the adverse party in double the value of the property as stated in the affidavit aforementioned, for the return of the property to the adverse party if such return be adjudged, and for the payment to the adverse party of such sum as he may recover from the applicant in the action.”

In the lending industry on the other hand, if a borrower or car loan applicant had such case as described above, there is a high chance of getting declined, disapproved or not allowed to apply for car collateral loan. The only solution to this instance if an interested party wants to clear out his name apart from getting loan approval is to settle the debt or case pending due to the cause of getting the property repossessed by the financing firm.

Now, with regards to the effect that this particular issue will incur to the loan applicant, the usual hit will be a lower loan approval just in case there is a presented document called court case clearance from the particular regional trial court assigned where the replevin case was filed. Settlement can be done with the involved party which is usually banks or financing companies.

low loan approval rateAs an agent for year now, my experience spans to more than 2 years. I had a case where a client had a replevin case and when I asked the marketing assistant in our office how much equivalent loanable amount can be applied to my client, he said that instead of as much as 80% appraisal value approval, the loanable amount will usually decrease to as low as just 60% only. The cause of this is obvious though that if a loan borrower had previous problems of getting a property repossessed, more so, a car of almost the same nature of loan, can cause the cash flow to drop down unless there is a convincing source of income or capacity to pay for the loan borrower. Borrowers with replevin case usually end up with high risk status just like when unpaid credit card bills get on the line or like when you have a BP-22 case (bounced check case).

Same rules apply and lending companies will usually have little to no trust that the borrower can be able to pay for the mortgage monthly amortization.