Steps for Car Loan Application for OFWs

OFWs go through so much sacrifice just so that they can earn enough money to send back home, sometimes even at the risk of not having anything left for themselves. It’s therefore no wonder that they feel much joy and pride once they save up enough money to invest in something valuable and tangible, like a car.

Being outside of the country can pose some questions and dilemmas, though, particularly in regard getting a car loan. Here are some helpful tips for you to finally own a car, with the help of a car loan and even when you’re abroad.


Step 1 – Choose Vehicle of Your Choice

The first step is also the most important in buying a car. You want to ensure that you’re making the right choice, especially because car ownership is a major investment.  Ideally, you should base your decision on your needs before your preferences. Is it going to be for your own personal use or is it going to be used by the entire family? Are you a city driver or do you foresee yourself using the vehicle for weekend off-road adventures? Would your daily activities require a sedan, SUV, pick-up truck, or family van?

Once you’ve determined the kind of vehicle you would want to drive, you can trim down the options further. A marketing professional can help you factor in the other components such as maintenance, service requirements, and even financing needs.

Step 2 – Apply for a Loan

It’s standard procedure for your marketing professional to have you fill out a car loan application. This is meant to ease the burden of payments on your part as buyer, so do make the most out of this opportunity well.  Be very careful of the answers you put in the form; this is going to be one of the basis whether the bank will approve your loan or not. Fill up the form concisely and honestly. Don’t worry because they will keep your information private and confidential.

Step 3 – Submit the Requirements

Taking long vacations from work tend to be challenging for most OFWs, that’s why you should have all the requirements ready immediately when you take out a car loan. Even while you’re still abroad, you can already start requesting for certain documents in advance, via online or through a legal representative, so that it will already be in process even before you arrive home.

Here are the requirements that you should take note of for your application:

  1. Local Co-Maker – Because you are not in the Philippines, you need someone who can legally represent you in this matter. If you’re married, your spouse can take on this role, with the Affidavit of Marital Consent as supporting document to prove that your spouse is indeed authorized to conduct the transaction in your behalf.

If your local co-maker is a family member or relative, prepare a Special Power of Attorney (SPA). Make sure that the format you’re using is the right one because there are different versions depending on the bank you’re working with. You may also get a form from the Philippine Embassy nearest you in your country of occupation. The SPA must be Consularized (document must have Red Ribbon), which means that it has been authenticated by the Consul office. Processing usually takes anywhere from three (3) days to two (2) weeks.

  1. Government IDs (2)These must be Philippine Government-issued IDs, not IDs from your country of occupation. You can use your Passport, Seaman’s Book, Driver’s License, SSS ID, and others as proof of identification.


  1. Proof of Employment – The contract for your current job (latest contract) will suffice as proof of employment. In the event that there is no contract issued by the company or entity you are working for, then at the very least you should be able to showyour Certificate of Employment with Compensation. You should also attach at least three (3) months’ worth of pay slips as proof of regular income.

If you’re a seaman seeking a car loan, take note that the latest contract you should present for this requirement should be the POEA version. If you already have a new contract as well, you should also submit this document to the bank


  1. Proof of Remittance – Apart from your proof of employment, you should also be able to present at least three (3) months’ worth of remittance receipts, such as those through Western Union, PeraPadala, and other money transfer services. This is important to show that you can regularly and consistently send money to the Philippines when you are away for work abroad. The bank or the lending institution will be using this as a gauge to determine if you do have the capacity to pay for the car loan in a timely manner.


  1. Proof of BillingLast but not least, you need to present a proof of billing from your home address in the Philippines. It could be a billing statement for your electricity, water, communications (landline, WiFi), cable TV, and others as proof of local residence. As another important note, having your own home will give you better chances of loan approval. Renting a home, however, does not necessarily mean you won’t be eligible for the loan.

As for the computation of the monthly amortization, this rate is computed at 1/3 your monthly income. The mode of payment will depend on your agreement with the bank, but it can take in the form of an auto debit (automatic deduction from your bank account), PDC (post-dated check), or bills payment.

Step 4 – Wait for Credit Investigation

Once you’ve submitted all your requirements, the only thing left to do is to wait for your car retailer’s partner banks to contact you regarding your credit history. Again, this is normal so don’t be all too worried about it. You can either receive a phone call or have a bank representative actually visit you at home for them to gather information whether you are a good candidate for a loan. As an important note, credit checks are free services so you should not be made to pay for anything.

Step 5 – Buy, Drive and Enjoy Your Brand New Car

Upon the approval of your loan, you can now sit down with your marketing professional to discuss the finer points of the car sale. There may be additional requirements to complete the transaction, but these shouldn’t be too hard to fulfill. As long as you get everything ready and organized, you’re well on your way to finally having your very own car earned from your hard work abroad.