Despite all your efforts to be financially stable, there are times that you would face difficulties. Be it an emergency that no one in the family anticipated or a sudden financial crisis that struck hard, or even a business venture you cannot afford to miss, there comes a need for you to reach-out for financial assistance that would help you through. You then look at what you have invested through hard work—either your house or your car—as the solution.
Most people are apprehensive in having their land titles or car ownership certificates, such as the official receipt and certificate of registration—collectively known as OR/CR—as collaterals for loan, which is understandable, as a default in payment would mean seizure of the properties. However, with confidence in your capability to pay and with the right financial guidance, there is nothing much to worry about. Loan with land title as collateral is something that most people still resort to in times of difficulties, in the same way that car loan with OR/CR as collateral is an option.
What should you know? At least three things would sum it up.
- The thing with land title collateral loan in the Philippines and car loan with OR/CR as collateral is that nothing is actually taken from you in terms of the physical asset. Despite having your land title as collateral, you still get to live in your house; the same is true with car loan with OR/CR collateral—you still get to use your car. This, of course, is for as long as you do not default in payment.
- Make sure that you get your loan from a reputable financing company. At the very least, a registered, legally operating financing company would do the paperwork for you and would disclose your rights to you pursuant to RA 3765 of the Truth in Lending Act. Mortgaging a property to an individual might give you an unfair deal that may lead to your property forfeiture.
- Make sure to do your own math. Retaining your collateral property is dependent on your ability to pay. If you are getting a loan to patch-up a financial emergency, would you be back on your feet by the time you start paying the loan? If you are doing it to start a business, would you be having return of investment as soon as you’re up for your initial payment? If you do not have any certainty in terms of your capability to pay, it’s as if you sold your land or your car for a value lesser than it truly deserves.
These suggestions might help you through with your financial needs; but of course, a reliable, reputable and trust-worthy financial institution would surely be glad to help you through. Do not endanger your land title or car OR/CR used for collateral in the Philippines. Consider giving every loaning institution on your list a call so you would see your options while addressing any concerns you may have with your property.