What to do next after paying off your car loan in the Philippines
Congratulations! You have just made the final payment on your car’s mortgage. But don’t relax just yet because the record needs to be set straight at the Registry of Deeds (RD) and at the Land Transportation Office (LTO). Your mortgagee may or may not handle the records updating for you. In case you have to do it yourself, here’s how.
Why bother at all? One good reason is that without updated records you won’t be able to legally sell your car. And, just as importantly, don’t you want to be the official owner of your car?
Your first objective is to obtain a Release of Chattel Mortgage, duly stamped “Received” by the RD. This is one of the documents you need for your transaction with the LTO. Here are the steps involved:
1. Claim the following from the mortgagee:
a. Release of Chattel Mortgage and Promissory Note
b. Your car’s original LTO Certificate of Registration (CR)
c. Your car’s original LTO Official Receipt (OR)
2. At the branch office of the Registry of Deeds where the vehicle’s mortgage was registered by the mortgagee, present the Release of Chattel Mortgage and Promissory Note.
3. The person at the counter will prepare an Assessment and Payment Order form. He will give this form to you and return your documents to you.
4. Present the Assessment and Payment Order form and your payment to the cashier. The cashier will give you an official receipt.
5. Go back to the person who issued the assessment and payment order form. Give him the official receipt and the documents. He will return the official receipt to you and tell you when you should come back for your documents. In my case, I was asked to return after five working days.
6. When you return to the Registry of Deeds, present the official receipt at the transaction counter. After a brief wait, you will receive the Release of Chattel Mortgage, duly stamped “Received” by the Registry of Deeds, and the Promissory Note. You will need these documents for your next objective, which is to get an unencumbered Certificate of Registration from the LTO.
At the LTO:
1. Bring your car and the above mentioned documents and request for a Motor Vehicle Inspection Report (MVIR).
2. The LTO staff will inspect your car and give you an MVIR.
3. Submit the following documents at the appropriate transaction counter:
a. Release of Chattel Mortgage and Promissory Note, duly stamped by the RD
b. Your car’s original “encumbered” LTO CR
c. Your car’s original LTO OR
d. MVIR
4. Pay the fees at the cashier. You may be told to wait or come back another day for your new CR and OR.
5. You will receive a new OR and unencumbered CR. Keep these under lock and key and keep photocopies in your car. Now you can relax!
By the way, if you intend to sell your car or buy a secondhand car, here's a detailed procedure on how to transfer its ownership:
How to transfer the ownership of a privately owned vehicle in the Philippines
Why bother at all? One good reason is that without updated records you won’t be able to legally sell your car. And, just as importantly, don’t you want to be the official owner of your car?
Your first objective is to obtain a Release of Chattel Mortgage, duly stamped “Received” by the RD. This is one of the documents you need for your transaction with the LTO. Here are the steps involved:
1. Claim the following from the mortgagee:
a. Release of Chattel Mortgage and Promissory Note
b. Your car’s original LTO Certificate of Registration (CR)
c. Your car’s original LTO Official Receipt (OR)
2. At the branch office of the Registry of Deeds where the vehicle’s mortgage was registered by the mortgagee, present the Release of Chattel Mortgage and Promissory Note.
3. The person at the counter will prepare an Assessment and Payment Order form. He will give this form to you and return your documents to you.
4. Present the Assessment and Payment Order form and your payment to the cashier. The cashier will give you an official receipt.
5. Go back to the person who issued the assessment and payment order form. Give him the official receipt and the documents. He will return the official receipt to you and tell you when you should come back for your documents. In my case, I was asked to return after five working days.
6. When you return to the Registry of Deeds, present the official receipt at the transaction counter. After a brief wait, you will receive the Release of Chattel Mortgage, duly stamped “Received” by the Registry of Deeds, and the Promissory Note. You will need these documents for your next objective, which is to get an unencumbered Certificate of Registration from the LTO.
At the LTO:
1. Bring your car and the above mentioned documents and request for a Motor Vehicle Inspection Report (MVIR).
2. The LTO staff will inspect your car and give you an MVIR.
3. Submit the following documents at the appropriate transaction counter:
a. Release of Chattel Mortgage and Promissory Note, duly stamped by the RD
b. Your car’s original “encumbered” LTO CR
c. Your car’s original LTO OR
d. MVIR
4. Pay the fees at the cashier. You may be told to wait or come back another day for your new CR and OR.
5. You will receive a new OR and unencumbered CR. Keep these under lock and key and keep photocopies in your car. Now you can relax!
By the way, if you intend to sell your car or buy a secondhand car, here's a detailed procedure on how to transfer its ownership:
How to transfer the ownership of a privately owned vehicle in the Philippines
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