- 1 Interest Rate started going up, ICICI bank raised Interest rate on Home and Auto Loan
- 2 Find the Best Car Loan in the Philippines
Interest Rate started going up, ICICI bank raised Interest rate on Home and Auto Loan
In a clear signal of a rising interest rate regime, country’s largest private sector lender, ICICI Bank, on Thursday said it has hiked its auto loan rates by up to 0.5 percent and withdrawn its 8.25 percent special home loan scheme. “Auto loans rack rates have been raised by 0.25-0.5 percent depending on segment and tenor with effect from March 5,” an ICICI Bank spokesperson said.
Though the bank did not give any reason for the rate hike, industry experts said that the rate increase was largely prompted by signals communicated by the Reserve Bank in its last monetary policy review.
With a view to suck out excess liquidity from the system, the RBI hiked the cash reserve ratio or the amount banks have to keep with RBI for zero interest by 0.75 percent to 5.75 percent, absorbing Rs 36,00 crore from the system.
Following the hike, interest rates for new auto loans will now be in the range of 9.75-11 percent.
ICICI Bank also withdrew its special home loan scheme, under which it offered home loans for 8.25 percent fixed rate for two years, effective from March 1, the spokesperson added.
On home loans, ICICI bank is currently offering home loans for up to Rs 30 lakh at 8.75 percent, loans between Rs 30 lakh to Rs 50 lakh at 9 percent and those above Rs 50 lakh, at 9.5 percent.
Another private sector lender, Kotak Mahindra Bank and the group’s car loan financing arm also announced hikes in their home and car loan rates respectively on Thursday.
While Kotak Mahindra Bank has hiked its home loan rates by 0.25-0.5 percent with effect from February 18, Kotak Mahindra Prime, which is the dedicated car financing arm of group, has hiked its loan rates by 0.5-0.75 percent.
“We decided to hike the interest rates for home loans by 0.25-0.5 percent. This is primarily to align lending rates in line with the cost of deposits,” Kotak Mahindra Bank’s Head of Retail Assets, Kamalesh Rao, said.
The bank’s home loan portfolio grew by 50 percent in the current year, he said.
Kotak Mahindra Prime’s Chief Executive Officer, Sumit Bali, said the hike in lending rates will come in to effect from March 8. “We are hiking the lending rates as the cost of funds have gone up by up to 0.75 percent. We have to pass on this additional cost to customers, which we didn’t do last month,” Mr. Bali said.
KMP has a total loan book of around Rs 6,500 crore, which grew by around 35 percent in the current financial year. Moving ahead, the company expects a loan growth in the range of 15-20 percent, he said.
Find the Best Car Loan in the Philippines
Through an auto loan, you can purchase a vehicle with the use of consumer credit. A car loan allows an individual to buy a vehicle that is more expensive than what could be afforded in a lump sum, or cash, purchase. With the help of financial institutions in the Philippines, a person can acquire a vehicle at more affordable payment terms, which is usually in an installment basis.
You can now choose an auto loan with flexible payment options to suit your lifestyle. With eCompareMo.com’s car loan calculator, your dream car is just a few clicks away.
There are many ways consumers can make use of an auto loan:
- Purchase a new or used vehicle through bank financing and paying it back for a specific period of time, which is usually in equal monthly amortization of principal and interest.
- Reimburse the cost of a brand new vehicle within 30 days from purchase.
- Get cash loan by using your existing car as collateral.
- Refinance an existing auto loan.
- At least 21 years of age and not exceed 65 years at the time of loan maturity
Get the best mileage for your budget
eCompareMo.com gives you the convenience of choosing from a wide range of car loan with the lowest interest rate, most flexible terms, hassle-free documentation, and the fastest processing time.
- Get a car loan starting from P100,000 up to 80% of the purchase price of the vehicle.
- Purchase a brand-new or secondhand car, SUV, or van.
- Finance your vehicle for up to 6 years for brand new vehicles and up to 4 years for secondhand vehicles.
- Have your car loan application approved in as fast as 8 hours.
Auto Loan in the Philippines: How it works
Getting a car loan in the Philippines is a convenient way to acquire a car without the need to shell out a huge amount of money. It is a type of personal loan that enables buyer to pay on a monthly basis instead of paying one time with a big amount.
To get approved, the potential buyer must have a good credit score as proof to the bank or preferred financiers that you are capable to pay on schedule. Clients are highly advised to pay a higher deposit to help lower interest rates and pay lighter monthly.
When to use an Auto Loan Calculator in the Philippines?
It is best to be well informed before signing up for a car loan.
There are numerous banks and financial institutions in the country that offer loans. However, information overload can cause confusion to customers, who often end up without full understanding of the terms.
It’s good that you can use a calculator that’s accessible online and compare available auto loan interest rates in the Philippines based on your monthly income and other specifications.
This will also help you choose the bank loan offer that caters most to your needs and financial capacity. It is also a time saver because you don’t need to go from one bank branch to another to gather the information you need.
List of Car Loans in the Philippines
Owning a car is everyone’s dream. However, not all are fortunate enough to own one. They don’t have access to the funds needed to buy the car of their choice. However, they can loan the necessary amount from any bank institutions. Here are the list of leading banks offering car loans in Philippines:
- Applicant must be between 21-65 years old
- Must be a resident of the Philippines
- For employed applicants, the gross income must not be below P50,000
- For self employed applicants, they must be the owner of a business and operating for at least 2 years
- Completely filled auto loan application form
- Photocopy of any valid ID (Passport, Driver's License, TIN ID, Voter's ID, SSS ID, GSIS ID, PRC ID)
- For employed applicants, they must submit the following (Original cop of COE or Certificate of Employment, Photocopy of at least 2 month pay slip, ITR or Income Tax Returh with BIR or bank stamp fot at least 1 year)
- For self-employed applicants, they must submit the following (Photocopy of latest ITR with BIR stamp, Photocopy of Business Registration from DTI or SEC, Copy of Audited Financial Statements of at least 2 years)
Frequently Asked Questions for Car Loans
Getting a car is made easy through car loan application. By borrowing money from banks, you get lower rates compared to other types of car financing. You’ll only need to meet the banks’ qualifications which involves your work tenure, meeting the minimum gross monthly income, providing your Income Tax Return (ITR), and completing other required documents.
To get started, use www.ecomparemo.com’s easy-to-use auto loan comparison portal to search for the best car loan rates. When you’ve found the right bank, our sales representatives will assist you with the loan application, free of charge. This saves you a lot of time and money in processing your auto loan.
The following answers for frequently asked questions about car loans should guide you through your preparations.
Can I make my own car as a collateral to apply for a car loan?
Yes. Some banks will allow you to use your own car as collateral when you apply for a car loan.
Will I need to pay a huge down payment when I apply for a car loan?
The down payment will depend on your car dealer. Nowadays, you’ll find dealers offering low up-front payments. It is your obligation to know how much your down payment will be for your chosen vehicle prior to applying for a loan.
When I get approved for an auto loan, how do I pay for it?
Auto loan repayments can be done over the counter (OTC) , through post-dated checks (PDC), or you can opt for auto-debit.
Can I apply for car loan, even I’m a foreigner residing in the Philippines?
Foreigners can apply for a loan in Philippine banks granted that they’ve had at least two (2) years of residency in the country, with Alien Certificate of Registration and a permanent work status.
I have an existing car loan in a bank, can I still apply for another loan?
You can still apply for a car loan in another bank as long as you have maintained good credit record and have the capacity to pay for another loan.
How to avoid late payment charges?
No matter your payment method, (see question no. 2) you should regularly pay on or before your due date. If you’re using post-dated checks, make sure that your account is well funded. Know your cut-off and due dates so you don’t miss any payments and avoid late payment charges.
What are the common vehicles I can apply for an auto loan?
The common vehicles that people apply for are action utility vehicle (AUV), sports utility vehicle (SUV), and sedan, whether brand new or second hand.
Can I still apply for a car loan even if I have a bad credit?
Getting a car loan with bad credit is not possible. Banks only accept applicants with good credit standing, with a gross monthly income of at least P50,000.
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