More often than not life throws surprises at us and we can hope that they are ones that are only pleasant. For the unpleasant ones, we must be ready financially to tackle the issue with ease. What do you do when you know that a loan is taking a lot of time to process and you do not have so much time at hand? You wonder if you could pledge one of your assets as security and get a loan instantly for the same. That is now possible in the Philippines, in the form of a car impounding loan. All you have to do is find which lending institution offers a car impounding loan in the Philippines, apply for it, get through the interview for the eligibility and you will have a loan that is at least 40 to 70 percent of the car’s fair market value. This whole process can take place in 1 to 3 hours if done in an organized manner. Easy, isn’t it? Know more below.
What is a Car Impounding Loan?
Car impounding loan is the only type of car collateral secured loan offer that can give you the fastest turn out of a cash loan proceeds without taking your car or OR CR Loan using car title.
Comparing both the loans, impounding your car can come up with a loan release in as fast as 1 - 3 hours during off-peak client hours, whereas, an OR CR Loan without taking your car can give you only as fast as a one day release loan.
So, if you are in need of quick money, you can receive it as quickly as 1 - 3 hours by impounding your car with the lending institution.
Different rates of interest are charged and computed by the owners of the lending institutions themselves on a pre-approved loanable amount. This loan amount is approved only after a physical check, engine run and test drive by the mechanic.
Also Check: Car Loan Interest Rates
How to apply for a Car Impounding Loan?
The application process for a car impounding loan is extremely simple. This can be done in three ways:
- After completing a thorough research on car impounding loans, finalize on the best option that suits your requirement and which lending institution you want to go with.
- Fill in the application form given by the lending institution.
- Undergo a 1 - 3 minute pre qualifying interview for the loan.
- After qualifying this interview, take your car for assessment.
- Submit the documents required and wait till the lending institution reverts to your application.
Eligibility for a Car Impounding Loan
Anyone who has a car registered in their name and needs a short term loan can apply for a car impounding loan. The below mentioned prerequisites must be met to be eligible for the loan:
- The applicant must be at least 21 years of age at the time of application of the car impounding loan.
- The applicant must have a fully owned car that is not undergoing any kind of financing or mortgage with a bank or any other financing company.
- The applicant must pass the pre qualification interview.
- The applicant must be willing to be assisted and sign the agreement for the lending institution to be their loan consultant, for which the service is free.
- The applicant must be willing to agree to all the terms and conditions of the loan and repay the amount via loan deduction, all the applicable fees and charges to the lending institution.
- The applicant must be willing to be referred to an affiliated bank by the lending institution in case the applicant does not own a checking account.
- The applicant must be able to provide 1 co-borrower while applying. This co maker or co borrower should preferably be an immediate family member or a relative)
Term and Loanable Amount
The tenor for the repayment of a car impounding loan can range from anywhere between a minimum of 3 months up to a maximum of 2 years.
The loanable amount is determined on the basis of many factors. Most often, through a car impounding loan, the car owner can borrow an amount up to 40 percent to 70 percent of the car’s fair market value. The fair market value or FMV is derived from the prevailing sale price of the car and it’s year model.
Some of the other factors that may affect the lower limit or the upper cap of the loan amount being disbursed or declared are:
- Appearance or Physical condition of the car
- Income and capacity to repay the loan and other expenses
This computation is usually done with the aid of a car loan calculator.
Mode of Repayment of Loan Amortization
The payment of the monthly amortization of the car impounding loan can be done by issuing a number of post dated checks. If you do not have post dated checks at that point in time, other arrangements can be made as well, depending on the lending institution.
- The car that needs to be impounded must be brought to the financier for assessment.
- The original OR CR of the car must be presented.
- The OR CR must be under the borrower’s name or the borrower must at least have a deed of sale to use as proof of ownership of the car. Additional charges may apply and extra time may be needed to fully approve and furnish the approval of the loan in this case but it is also possible for a few hours for the loan proceeds handover.
- Own checking account may be needed on a case to case basis but not always required.
- The car or impounding unit must be fully owned and must be under the borrower’s name. If it is not under the borrower’s name, a deed of sale, SPA or some legal corporate board resolution must be presented. Otherwise, those who have the OR CR under his or her name as the borrower will have the fastest loan processing advantage.
- This form of loan accepts Muslim brothers, Politicians, Military, Police, Business Owners, Lawyers and Corporation Owners and all similar entities that a ordinary private lending company will not approve or will decline as a part of their primary lending rules.