Don’t miss out: How to get an auto loan

Metro Manila (CNN Philippines) — There are some things in life that are just too good to pass up.

It could be an awesome out-of-the-country trip with your friends, a great job offer or even the chance to go the “next level” with that someone special.

It’s the same thing with cars: that brand-new model you’ve been reading about in magazines is finally available in the country, but somehow you feel like you’re just not ready yet.

Indeed, raising money for a new car isn’t as easy as it seems. And with Congress’ proposal to hike taxes on new vehicles, it’s about to get even more challenging.

But as they say, in every challenge there lies opportunity.

By getting an auto loan, you can have the power and means to take the plunge. Here’s what you need to know:

1. Know what car you need.

Do you need a small hatchback to thread through traffic with? Or do you need a van to haul lots of people and things?

It’s vital that you know what and how you will use the car for so that you won’t have to pay for years for something that doesn’t work for you. Reputable banks have an online Auto Finder that can help you find the perfect ride, whether brand-new or pre-owned.

2. Know the jargon.

Every auto loan has four essential components: the Downpayment, the Amount Financed, the Interest and the Amortization.

Downpayment

Pertains to your share (initial payment) of the car’s cost. If you’re eyeing a ₱1-million compact sedan and you can pony up a 30-percent Downpayment, that means your share of the car is ₱300,000.

Amount Financed

The amount you’ll borrow from the bank. Following the computation above, after you make your Downpayment, your Amount Financed will be ₱700,000. Banks offer the option of paying the Amount Financed back up to 72 months — or 6 years.

Interest

The amount you pay on top of the Amount Financed. As with all loans, this is the charge for making the bank wait to get its money back. Remember, the Interest is higher the longer it takes for you to pay back.

Amortization

A fancy term for your monthly payments, comprised of the Amount Financed plus Interest.

3. Do the math.

Math may not be everyone’s favorite topic, but when you’re buying something that’s worth six or seven figures, getting the numbers right really matters.

Make sure to pick a loan option that is within your means — a longer loan term means lower monthly Amortization and a shorter loan term means higher monthly Amortization. You have to keep in mind that Interest rates may also vary depending on the term you choose.

If budget permits, you may also opt to increase your Downpayment so you can enjoy lighter monthly Amortization.

Now, if you need help crunching those numbers, banks also have an online Auto Loan Calculator that can help you figure out the payment terms that’s right for you.

4. Prove your worth.

As with all loans, you must prove that you are financially capable to make the monthly payments in full and on time.

This usually means giving documents related to your income, such as your certificate of employment and income tax returns.

If you are employed abroad, prepare proof of remittance for the last three months as part of your income documents.

5. Explore online.

Getting a loan may seem like a tedious process for most people.

But with BDO Auto Loan’s online facility, you can apply for an auto loan anytime, anywhere.

If you apply online for a BDO Auto Loan now until September 30, 2017, you can choose between a dash cam or waived fees up to ₱20,000 as your freebie.

So you see, even though some things (and people) in your life may slip through your fingers, sitting behind the wheel of a car you’ve always wanted doesn’t have to be one of them.

For more information about BDO Auto Loan, click here.

*With complete application documents and requirements.