This is an incredible story about how I got to removed the “Encumbered” status from my Car’s Certificate of Registration (CR).

After four (4) long years, finally, I paid my car loan to its last single cent. Imagine the happiness that I’m feeling right now while I’m writing this article?

No more monthly payments, no more checks to sign and to fund. Total FREEDOM!

Anyway, what I’m going to discuss right here and how is how I managed to get the copy of my original documents such as the Car’s Encumbered Certificate of Registration (CR), Official Receipt (OR), Cancellation of Chattel Mortgage, a copy of my Promissory note and lastly, the Unencumbered Certificate of Registration (CR).

Just a background story, for the purpose of this article, I’ll be narrating my own experience with regards to my car loan and how I processed it. So before you get bored, let’s start!

My Very First Car Acquisition

My car was acquired on October 2014 through a car loan from the Bank. It was from China Bank Savings. If you’re wondering why China Bank Savings, I still have no idea. It’s just that the Car Sales Representative endorsed my application for loan to them. Anyway, the usual process have transpired. I submitted all the documents until it was approved and released my car.

When I got my car, I was just given a photocopy of the car’s original receipt and certificate of registration. Note that for every car loan approved by the Bank, the original documents related to the car are kept by the Bank.

As a noob car owner, I was surprised by this but according to the people I talked to, its pretty normal and standard. The bank usually do that. The original documents serves as your collateral when you fail to pay the monthly amortizations.

After Four Years…

Fast forward to this year, when I finally finished my payment. Since I already have the knowledge that after payment, I must obtain the original copy of the original copy of original receipt and certificate of registration. I immediately called the head office of China Bank Savings to inquire. I didn’t know who to talk to so I just asked the Telephone Operator to connect me to the Car Loans Department. She transferred me to the right department and explain to the person on the other line my situation. She told me that I should give her Forty Eight (48) hours to start working on my documents and car loan. I patiently waited and call back the next day.

Forty Eight hours have passed and I called to ask the status of my request. She confirmed that I no longer have any amount due to them and my car loan are already fully paid. Also, my documents are ready for release in their head office. She also mentioned that there will be a small fee to be paid. She asked me for my schedule when I will be able to pick up those documents. I told her my schedule and we both said goodby and hang up the phone.

When I got to the China Bank Savings head office, I informed my contact person that I arrived already. She prepared all the documents for release and handed me a deposit slip for the payment of the notary public fee of the cancellation of the chattel mortgage.

Chattel Mortgage, Promissory Note and Other Important Documents

By the way, the chattel mortgage is a loan arrangement in which an item of movable personal property acts as security for a loan. The movable property, or chattel, guarantees the loan, and the lender holds an interest in it. This is the document issued to you when you have a car loan. While the cancellation of chattel mortgage cancels the previous document mentioned.

I went down to the ground of their building where a branch of their bank is situated to pay the fee. Rights after that, I gave the receipt to my contact person and she gave me the original copies of the following document.

• Chattel Mortgage
• Cancellation of Chattel Mortgage
• Official Receipt
• Certificate of Registration (Encumbered) and
• Promissory note

She also gave me a small piece of paper that serves as a guide in how to request the status of my Certificate of Registration changed from “Encumbered” to “Unencumbered”.

Encumbered mean that the car is declared as owned by a person or an entity (which is me) but subject to a legal claim by another person or entity (which is the bank).

I have taken a photo of each documents I received but for the purpose of confidentiality, I have covered personal information.

The Promissory Note with Chattel Mortgage

Cancellation of Chattel Mortgage

Official Receipt

Certificate of Registration

So to remove the bank’s claim agains my car, I need to do further processing and apply for a new copy of my car’s Certificate of Registration. To be able to start this process, we need to run down first all the required documents.

• Letter of request for the cancellation of my Loan and Chattel Mortgage addressed to my Bank
• Encumbered Certificate of Registration (original copy)

Since the my bank voluntarily issued me the Letter of request for the cancellation of my Loan and Chattel Mortgage was taken care of by my bank, my requirements are already complete.

The next step is I need to bring this documents to the Registry of Deeds where my loan was listed. The Registry of Deeds will issue a form of cancellation on the encumbrance of my certificate of registration.

Also note that the Registry of Deeds branch that I need to visit is the branch indicated in my Promissory note or Chattel mortgage.

You need to fill out an application registration form.

The presence of your car is not mandatory in Registry of Deeds since you are just cancelling the documents (Chattel Mortgage/Promissory Note). A small fee will be collected, an amount of P900 to 1000 depending on the mortgaged amount of your car.

Processing time depends on the Registry of Deeds Branch, few lucky ones got their documents after several hours but several people claimed that the processing takes one (1) to three (3) business days.

After waiting for considerable time, the Registry of Branch will give you a copy of the “Release of Chattel Mortgage with a Cancelled” mark/stamp by the Registry of Deeds.

It also include the Official receipt of the payment made for the cancellation as well as the Promissory Note.

Last step is go to the LTO Office with your car including all the documents from the bank plus the official receipt issued by the Registry of Deeds, release of Chattel Mortgage dully annotated by the RD.

Make sure to bring the following:

• Original Certificate of Registration (Encumbered)
• Latest OR of MVVC & other fee payment
• Release of Chattel Mortgage issued by Registry of Deeds
• Your TIN Number
• and lastly, the accomplished Motor Vehicle Inspection Report (MVIR)

Also, make sure to bring your car to LTO for inspection, engine & body number stenciling. The process will take you two (2) to four (4) depending on the volume of applicants. Just make sure to bring all the needed documents and never ever transact with the FIXERS within the LTO Branch.