Thinking of Getting a Car Loan? Be Careful When Choosing Your Co-Maker

Some of our buying decisions may be based on impulse. When you are feeling hungry, you buy a snack. When you spot something you like, you might probably end up carrying a paper bag with that item an hour later.

But there are some purchases that require thorough researching, thinking, and saving – like buying your first car. Owning your first vehicle is exciting, but you also need to be practical and level-headed or else, you might forget what is important: your budget.

[Image Credit: Wikimedia Commons]
[Image Credit: Wikimedia Commons]
Before focusing on details like installing the latest type of audio system or car seat covers that match your car’s color, concentrate on the bigger picture first, which is your budget. Are you going to pay the car in cash or by installment? If you are going to buy it in installment, you need to check your budget and look for appropriate co-makers for your loan.

A Facebook user and freelancer warned people regarding choosing your co-maker. According to Manuel Zerna, you should choose your co-maker wisely.

[Image Credit: Alpha Stock Images]
[Image Credit: Alpha Stock Images]

Cross-Default Loan

Manuel’s story is unique. He loaned a car from a well-known bank in the Philippines with two co-makers. He is religiously paying his monthly obligations when one day, he got a call from a collecting agency telling him that his car is for settlement. According to the agent, his loan was cross-defaulted as one of his co-makers have an unpaid car loan.

What is a Cross-Default Loan? A cross-default loan is when the collateral for one loan is also used as a collateral for another loan. If you secured a home loan, with your house as a collateral, and secured another car loan from the same bank, with the car as the collateral, these assets can be used as cross-default for all the loans.

Manuel reiterated that he is the principal borrower of the car loan and the car is under his name. It is also set with an auto debit agreement under his name. He also said that he did not sign any documents for the co-maker.

[Image Credit: Manuel Cerna / Facebook]
[Image Credit: Manuel Cerna / Facebook]

Demanding Full Payment

He went to two bank branches but they were not able to help him so he called the third party collecting agency again to settle the problem. The comapny is demanding 391,000 for the full payment of the car.

The car is still in Manuel’s possession and he doesn’t have any intention to surrender it voluntarily. His lawyer said that he should continue paying while he is sorting things out.

Read the whole story here:

Be careful sa mga naay plano mag loan ug car from banks. CHOOSE YOUR CO-MAKER WISELY. Sa mga sigeg ask naunsa jud akoa…

Posted by Manuel Zerna on Monday, March 12, 2018