Pick The Most Convenient Way Of Payment
Getting a car loan through our bank made making monthly payments a breeze.
They simply deducted the payments from our savings account. We just fund the account on a regular basis and do nothing else, literally. And with the rise of cashless payments, making bank deposits and payments even got easier.
Types Of Personal Loans From China Bank Savings
Depending on your needs, one of these CBS personal loans might be right for you.
- Personal loan. Known as the Easi-Funds Personal Loan, this is an unsecured loan that can be used for any purpose without a need for collateral. You can borrow between PHP30,000 and PHP1,000,000 for 12 to 48 months.
- Salary loan. If youre an employee at a CBS-accredited company, you can apply for personal loans from PHP10,000 to PHP500,000. The loan is payable up to 36 months through salary deduction and comes bundled with free life insurance and permanent disability cover.
- Automatic Payroll Deduction Salary Loan. The Easi-APDS Loan is a multi-purpose, unsecured loan facility open to staff employed by the Department of Education . Borrow from a low minimum amount of PHP5,000 to a maximum of PHP1,000,000.
- Auto loan. Finance a new or used car with CBS Easi-Drivin Auto Loan. You may choose between a regular auto loan or a comprehensive loan, which is inclusive of a chattel mortgage.
Have A Clean Credit History
Having debt and unpaid credit is a big no-no.
Will you lend money to someone who has tons of debt? Thats right, you wouldnt. Same goes for banks and dealers.
They take risks in lending money to people hence the stringent process. Should you have existing debt, it would be advisable to pay them off prior to applying for a car loan.
Youll have a better chance of approval when the lender sees you have no existing debt or show proof of your ability to pay.
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Make Sure You Understand The Terms Of The Loan
Do your due diligence when it comes to reading the terms and agreement of your loan.
If you have any questions or need any clarification, dont hesitate to contact your lender.
Doing this early will help avoid any issues later if a particular condition or clause in the agreement does not sit with you well.
The Need For Transparency
The sample of Chinese contracts raises questions about how the requirements are implemented but also suggests potential policy responses, the authors told Devex.
It remains unclear how these contracts are enforced or how the special accounts work in practice. But the various rights China lays out in the contracts gives it leverage whether or not it chooses to enforce them, Gelpern said.
On the policy front, there needs to be a renewed call for improved transparency not just for China, but for all lenders, most of which often fail to make contracts publicly available, the authors said. The transparency challenge can also be tackled on the borrower side, and countries can be encouraged to pass legislation making contracts public. Countries should incorporate disclosure into their domestic debt authorization frameworks for domestic legitimacy and accountability purposes, Gelpern said.
The study showed that China continues to make loans even in countries where contracts were made public, Parks said.
One worry is that if other creditors see these contracts, theyll rush to follow Chinas example and require additional collateral or other requirements in their lending, Gelpern said. If that happens, low-income countries struggling with unsustainable debt burdens are the ones that will suffer, she said.
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Preparing To Open A Chinese Bank Account
Preparation can be broken down into two simple categories: choosing your bank and gathering the appropriate documents.
Which China Bank Should I Choose?
As I mentioned earlier, the most important factor to consider when choosing your bank is convenience. Bank of China is the largest in China, but personally I dont keep most of my funds there because there isnt a branch or ATM immediately near my home.
Also, your account is tied to the specific branch in which you open it. So if you need to change your PIN, report a stolen card or something of this sort youll need to go back to that exact branch. Another reason to pick one near you.
IMPORTANT: Not every China bank or China branch for that matter will allow a non-Chinese person to open an account. Many travelers and expats have reported to me that theyve had to go around to 5-10 different bank branches until they found one that would allow them to open an account.
What Do I Need to Open a Chinese Bank Account?
There are a few things that youll need in order to open a bank account in China:
Dont Switch Jobs Prior To Applying For A Car Loan
Stay at least 2 years with your current employer if you want better chances of getting approved for an auto loan.
Why? Because lenders want to show you have a stable source of income.
They would prefer to lend money to someone who worked for the company for years over someone who just started.
If you dont have a savings or credit account with a bank, lenders will rely heavily on your employment history to gauge if you are financially able to cover the costs of the loan on a monthly basis.
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Opening The Account At The Chinese Bank
Once youve picked the bank and put your passport and cash in your pocket, set aside an hour or two and head over to the nearest bank branch.
If you have a local Chinese friend that can accompany you, this might help speed up the process. Its not necessary, however. You should be able to do this by yourself . As Ive said before, its possible to travel in China without speaking Chinese, and its also possible to open a bank account in China in the same way.
The first place you need to stop is the information desk to speak with the staff and get a wait number. Tell them that you are opening a new account and often they can help you fill out the form.
Say: W xing ki ygè yínháng zhànghù
Sometimes the bank account application form they give you is in both English and Chinese, but thats not always the case. Either way, unless youre confident can write your address and information in Chinese characters, the staff is usually able to help you.
Theyll also likely go make a copy of your passport and visa that youll need later.
When your number is called, provide them with your passport and the form. Theyll have you sign a few other documents, tell you how much money is required for deposit and hand a new UnionPay Bank Card.
At some point during the process a small keypad next to you will light up and scream at you to input a password. All China bank passwords are 6 digits long and youll probably have to input it a few times while youre there.
Be Honest With Your Financials
Theres nothing good that will come out of lying about your financial status or capacity.
Even if you get approved, youll still end up as the loser in the end if you fail to pay the monthly amortization because theyll just take your car back.
Its just not worth it. You might even end up facing legal consequences if you are not truthful in your financials.
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How Does China Lend Insight From A Study Of 100 Loans
The opaque nature of Chinese lending through its Belt and Road Initiative has raised questions among critics about the nature of Chinese loans. New research out Wednesday analyzes 100 Chinese loan contracts to 24 countries, providing insight into how China uses such agreements to gain leverage and calling attention to the need for more transparency in sovereign lending.
The contracts dont include overt promises of ports or mineral reserves in the case of default. But they do illustrate a country that is aggressive in its terms and seeks to place itself in a position superior to other lenders, authors of the study told Devex.
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There is not any particular smoking gun clause. Its more the combination of clauses that together add up to impressive bargaining power vis-à-vis the debtor and vis-à-vis the other creditors, said Anna Gelpern, a professor at Georgetown Law and one of the reports authors.
The study, How China Lends: A Rare Look into 100 Debt Contracts with Foreign Governments, mostly examined contracts from the China Development Bank and China Exim Bank. Its the first systematic analysis of the legal terms of Chinas foreign lending, according to its authors.
Apply For The Car Loan
Actual steps may vary depending on which lender you decided on but in general, the steps are the same.
It will be provided on the lenders website so all documents and requirements to be submitted will be clearly laid out for you.
On our case, we used the banks online service to initialize the process. For the actual submission of documents, we made a couple of calls and visits to the person handling our case at the bank.
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How To Open A Bank Account In China
If you still feel inclined to open a China bank account, here are a few simple steps to follow.
Keep in mind that for most expats or travelers going through this process of opening a Chinese bank account, it takes a few hours and sometimes a few days. There are many reasons for this, but what you need to know is that its good to budget a good portion of time to get this done.
Arrive at the bank the moment it opens in the morning to see if you can avoid waiting in line.
Follow these three steps and in no time youll be walking out with your very own China bank card.
S On How To Apply For China Bank Car Loan / Auto Loan
CHINA BANK CAR LOAN Here are the steps on how to apply for an auto loan to China Bank.
Undeniably, having your own car nowadays has a lot of benefits. It can save you not only time but as well as energy. You can get to your destination on time as you are the one controlling your time and speed.
Although you may still with traffic at times, you can have it in a way that you rest comfortably inside your own car well-ventilated and away from dust.
Those are just some advantages of having your own vehicle that is why a lot of people consider looking for ways to obtain one. You may actually apply for an auto loan like the China Bank car loan.
The China Bank car loan comes with very low interest rates, very low monthly amortization, and very low downpayment. You may also have it in longer payment terms.
The bank offers loan not just for the purchase of a brand new or second-hand vehicle but as well as the reimbursement of the cost of a brand new car within 30 days since purchase.
To apply for the China Bank car loan or auto loan, you may follow the steps below:
The China Bank officers or staff will check your requirements and eligibility for an auto loan. For successful applicants, you will be asked on how you want to receive the money you borrowed.
The next processes for the approved car loans may vary depending on the objective of applying for an auto loan.
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Several Banks To Choose From
Human beings love to have choices. People are intrigued by having several alternatives to consider. Getting a loan from another country provides a vast pool of banks to choose from. Nobody restricts you to your country. However, you need to make an informed decision, especially if you are spoilt for choice. As such, it is wise to seek professional advice before making any substantial financial decisions.
How Chinas Loans Work
The Belt and Road Initiative is an ambitious infrastructure initiative launched by Chinas government in 2013 that has entailed a dramatic increase in Chinese lending to low- and lower-middle-income countries. The initiative has come under fire, with some questioning its motives and whether it has made unsustainable loans and contributed to rising debt levels.
The loan agreements are written to position China as a preferred creditor that could seek repayment first in the event of a problem or default, Parks said.
It does so in two primary ways: by requiring borrowers to create separate escrow or special accounts with cash balance requirements that China can seize in case of default, and by essentially requiring countries to exempt Chinese loans from restructuring efforts with other lenders. The study refers to these as no Paris Club clauses, referring to the informal group of official creditors that coordinate solutions for debtor countries with payment difficulties.
Those special accounts Chinese lenders require of borrowers are found in about 30% of contracts. They are often kept secret, making it difficult to get a clear picture not only of loan commitments but of revenue streams and resources available to countries, said Scott Morris, a senior fellow at the Center for Global Development and one of the reports authors.
Chinese lenders behave a lot like commercial lenders.
Brad Parks, executive director, AidData
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Can I Open A Joint Bank Account In China
No, you cant. Chinese banks dont do joint accounts like you find elsewhere in the world. Only one name is allowed to be on the account and only one UnionPay card can be tied to that one account.
If youre wanting to share an account with your spouse or significant other, youll also need to share a bank card. Its annoying, but thats the way China does it.
Choose Between Bank Or Dealership Financing
I ended up getting a car loan through a bank mainly because of these reasons:
- The interest rate was lower compared to dealership offerings I looked at during that time
- It was one of the most popular when it comes to auto-loans
- We had a friend working there who can help us with the whole process
Obviously, these reasons are unique to me. Its what I thought was best at that time when we were deciding to choose a financing scheme. And thats the whole point.
Taking your current situation into consideration, which method will work best? Theres really no right or wrong answer when it comes to choosing between these two.
Some will prefer the lower upfront payment of dealership offerings. Some might prefer banks simply because they have an account there already.
Bottom line is, whatever reason you might have, make sure youll choose something that suits your overall financial strategy well.
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Why Not To Open A China Bank Account
Before I dive into the how-to of opening a bank account in China, I first want to cover a few reasons not to open one.
- You Dont Live in China. If youre just traveling through China as opposed to actually moving to China or doing business here, taking the time to open a China bank account doesnt have many advantages. Most every ATM in China accepts Visa and MasterCard, so save yourself the hassle and use cash instead.
- No Investment Experience: For those not living in China who want to open an account in an effort to diversify your portfolio, make sure you know what youre doing. Investment in the Chinese Yuan isnt crazy, but it isnt for the inexperienced.
- You Just Want a Chinese UnionPay Card: There are advantages to having a UnionPay card in Asia, thats for sure, but opening a Chinese bank account isnt the only way. There are other options.
Its worth noting that its virtually impossible to open a bank account in China remotely.
Youll need to be physically present in the bank in order to open an account.
Cexim Concessional And Preferential Loans
Concessional and preferential loans are available from CEXIM, China’s export bank, to sovereign borrowers at interest rates subsidised by the Chinese government. These loans come in the form of:
- concessional loans or
- preferential buyer’s credit.
CEXIM also offers buyer’s credit on market terms.
Concessional loans and preferential buyer’s credit are subsidised from different budgets. As a result, concessional loans are denominated in RMB and preferential buyer’s credit loans are denominated in USD. The two products also have different counterparty funding arrangements. Concessional loans are able to fund 100% of project costs, while preferential buyer’s credit can only fund up to 85% of project costs.
Both products are typically priced around 1%-3% fixed interest rate – generally around 2% – with a five year grace period and tenor of up to 20 years. Generally speaking, comparable concessional loans tend to provide more favourable pricing and terms than preferential buyer’s credit. By way of comparison, a study published by the Centre for Global Development in April 2020 found that the World Bank’s loans to developing countries come with a 1.54% fixed interest rate, 10 year grace period and 40 year maturity.
Concessional loans and preferential buyer’s credit tend to take considerably longer to reach signing and disbursement when compared to commercial loans.
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