6 Helpful tips if you’re applying for a motorcycle loan for the first time

We help make the process easier
by Aris Ilagan | May 8, 2020
PHOTO: Aris Ilagan

In anticipation of the limited-capacity policy for public transportation upon the lifting of the enhanced community quarantine (ECQ), the Department of Transportation (DOTr) has advised commuters to start considering motorcycles or bicycles as their daily rides. Under the rules of general community quarantine (GCQ), buses and jeepneys will be required to cut their passenger capacity by as much as 50%, while tricycles will only be allowed to take one person. That’s a nightmare in the making for commuters.

The suggestion to shift to bikes and motorcycles is no problem for those already familiar with these two-wheelers. But for those who haven’t tried them at all, it can be a bitter pill to swallow. But whether you like or not, you might soon see yourself traveling this way in order to adapt to the situation.

Let’s focus on motorcycles. If you’re thinking of buying one, budget can be a big issue. If this is a concern, you can opt for Plan B: a motorcycle loan.  


Having second thoughts? Well, according to the Motorcycle Development Program Participants Association, which comprises the big Japanese manufacturers, 90% of the total number of motorbikes sold here in the Philippines are through financing.

Hopefully, we can help you with your decision. Here are some simple, easy tips when applying for a loan for your first-ever motorbike.

1) Go window shopping.

Before you apply for a loan, make sure you have some idea of the motorcycle brand and model you really want. Consider at least three choices, and take note of their respective prices. It’s important that you have an idea how much the bike costs so you won’t run short of money.

2) Modern technology makes the process easy.

Online services allow loan applicants to transact with an agent from the comfort of their home or office. The application process is available through financing websites, and there are throngs of agents wanting to serve you. There’s no need to visit them personallyunless it’s time for you to close the deal and submit the requirements.

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3) There are two sources to choose from.

When applying for a motorcycle loan, you can go with an in-house loan, which is most likely an extension of the motorcycle dealership, or you can course it through a bank. Make sure you check both options first before making a decision, so you can choose the one with the lower interest rate.

4) Complete the requirements.

When the agent tells you to complete the requirements first, do it; otherwise, there won’t be any progress with your application. The basic requirements normally include an accomplished and signed application form, your latest payslip, a certificate of employment, photocopies of at least two government-issued IDs, and proof of billing.

In addition, overseas Filipino workers must submit documents showing three months’ worth of remittance. Those who are self-employed need to produce their Department of Trade registration papers.

5) Take note of the payment terms.

Don’t get over-excited. Always remember the dates of payments, the amount of your down payment (usually between zero to 50%), the loan’s interest rate, and any penalties in case of delayed payment. More often than not, loan providers usually ask for postdated checks for each monthly payment. This replaces the old-school system in which the applicant is required to submit collateral as a guarantee for their loan. More important, you have to know the conditions in the event of payment default and the possible remedies available in case that happens.


6) Credit investigation is now simplified.

Gone are the days when a credit investigator would roam around your village to check if you really own the house, as well as how many cars you have in the garage. These days, it only takes a few seconds to verify if you have a good credit standing.

A few extra notes: Creditors usually require the motorcycle buyer to get insurance for the unit. They also take custody of the spare key and the original copies of the registration papers until the loan obligations are fully settled.

Times have changed. A few years back, banks did not offer motorcycle loans. Nowadays, their personnel will be stalking you 24/7 to offer their services, be it for a small or big bike. We suggest you inquire first with the creditors to find out how simple it is to obtain a motorcycle loan. Try it, don’t be shy.


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PHOTO: Aris Ilagan
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