6 Easy Steps to Get your Car Loan in Philippines
Getting a car loan in Philippines Updated March 2023
Fed up with terrible traffic?
With the worsening traffic in Metro Manila, having a car for those who live in nearby areas, yet working in the capital is now a necessity. We used to think cars were only for the rich. However, in recent years it has been made more affordable with the use of flexible car loans.
Car Loans in Philippines
A car loan is a type of loan specially created to acquire cars and other products related to car ownership. It gives those who are unable to purchase in full the chance to buy a car through installments. The financial institution or bank will pay the remaining amount of the vehicle after the buyer has paid the required down payment. The borrower will then repay the debt in the agreed repayment scheme.
A car loan can either be a secured or unsecured loan. Most lenders prefer the secured loan and use the car as collateral. If the borrower is unable to repay the loan, the car will be repossessed. With unsecured car loans, the failure of the borrower to pay will not cause the loss of the car. However, the borrower must have an outstanding credit history to get an unsecured car loan.
If you have enough cash to pay for the car at once, then good for you, yet if you don’t have enough money and think you can pay in installments, you can use a car loan to buy your vehicle.
Car Loan Comparison
Here is a brief comparison of all the auto loans available in the Philippines. Read each carefully so you can decide which bank facility you will apply to.
BDO Auto Loan
BDO offers an auto loan to those with a minimum gross family income of P50,000 per month and with a stable source of income, either as employed or self-employed. The minimum amount of the loan is P100,000, and the maximum amount is up to 80% of the Vehicle Purchase Price, provided that you pay the 20% as a down payment. BDO also finances used cars up to 70% of the Vehicle Purchase Price.
PSBank Car Loan
PSBank car loan requires a gross monthly family income of at least P30,000. Like most other banks, the borrowers must be 21 to 65 years old upon the loan’s maturity and have worked in a company for at least two years. The car loan has a minimum of P100,000 and is payable between 12 to 60 months, depending on the agreement.
Philippine National Bank (PNB) Auto Loan
PNB offers a loanable amount of P300,000 up to 80% of the cash list or purchase price For Brand New vehicles and P150,000 up to 75% of the appraised value for Second-Hand Vehicles. Specific eligibility is subject to a personal consultation.
Security Bank Car Loan
Security Bank offers a car loan of up to 80% of the car’s purchasing price to be paid with interest within 12 to 60 months. The borrower must have a minimum joint monthly gross income of P40,000.00 together with his/her spouse if buying a brand new vehicle and P20,000 if purchasing a second-hand or used car.
BPI Car Loan
BPI car loan offers amounting to up to 80% of the purchase price for Brand New vehicles to be paid within 1 to 6 years and 70% for Pre-Owned cars to be repaid in 1 to 5 years. Borrowers must have at least P30, 000.00 worth of monthly family income.
Metrobank Car Loan
Metrobank has car loans with a minimum of P250,000 and a maximum of 80% of the net selling price to be paid with interest within 12 to 60 months.
East West Bank Car Loan
East West Bank Car Loan is offered to Filipino citizens at least 21 years old with a regular monthly income of P40,000. The loan can finance. Loan terms can stretch up to 60 months with an interest rate ranging from 4,95% (12 months) up to 32%. The interest rates will be lesser if you pay your monthly dues in One Month Advance.
UnionBank Auto Loan
With UnionBank Auto Loan, you can borrow from P200,000 up to P5,000,000, depending on the bank’s discretion. You can pay the loan from 12 months up to 60 months through Post Dated Checks and Auto Debit Arrangements.
RCBC Car Loan
With RCBC Car Loan, you can apply for a loan amount of P300,000 up to 80% of the unit. The maximum loan term for brand-new cars is 60 months, while used cars have only 48 months.
BOC Car Loan
BOC Car Loan is used to purchase a brand-new car. You can buy a passenger car, a Sports Utility Vehicle, Light Commercial Vehicle, and Asian Utility Vehicle. However, you can’t use it to buy a used car.
China Bank Car Loan
China Bank Car Loan is a multi-purpose secured loan. This means you can use it for any reason you want with your car as collateral. This car loan lets you purchase a second-hand car, while other car loans do not.
AUB Auto Loan
AUB offers an auto loan with P200,000 as the minimum loanable amount, which you can pay in 12 to 60 months. The loan is only payable via Post-dated Checks (PDC) or Auto Debit Arrangement (ADA).
China Bank Savings Auto Loan
China Bank Savings Auto Loan has a fixed interest rate to help you plan your finances. However, the minimum loanable amount is Php250, 000. This is higher compared to the other car loans from most banks.
Grab a Car with an Auto Loan
With a car loan, you can now take home your car even without paying the full amount in cash. It is simple: the lender will pay the remaining price after you have paid as much as 20% of the selling price or the amount required by the lender according to the contract. Then you will pay the lender who purchased your car. You have to pay with interest in the service the lender had granted. If the car you want to is worth P450,000, then you just need at least P90,000 to pay the downpayment upfront.
However, you must be reminded that there are still certain fees that you also have to consider, such as the processing and documentation costs.
Cash Mart’s Car Loan
Cash Mart offers a flexible Car Loan you can receive within 24 hours at the most affordable price. You will be assured of a fast online transaction with lesser requirements than the banks.
You can receive your cash within the day provided that you have a personal bank account and you are able to present complete requirements online.
The whole process is indeed online and there is no need to drop by the office personally.
Car Loan Application in Philippines
If you wish to get your loan approval, you better follow these steps when taking out an auto loan.
Step 1: Consider your finances
A car will be one of the most expensive purchases that you will ever do in your life, next to perhaps your house and lot. It is not easy to suddenly add more to your financial responsibility, especially if you already have a family or you still have siblings to send to school.
Before you decide to get a car, consider your expenses and savings. Can you handle a sudden medical emergency bill once you are committed to paying monthly? Can you still live at ease despite having a car loan?
Step 2: Choose a car
There are a lot of cars on the market. Now that you already have an idea of how much you are ready to spend on your ride, you can begin to shop around online and by going to various showrooms. Do not be afraid to test drive because you have to know if the car is comfortable.
Be very critical of how easy the stirring wheel turns, how comfy the leg room is, and how far you can see the road through the windshield.
Little annoyance can be a big deal in the future, so be sure you are satisfied with the car unit.
You can even check reviews online ahead of time before going to showrooms and asking the dealer about unclear things.
Step 3: Auto Loan Calculator
Compare the car loans offered by lenders with the use of the auto loan calculator. Lenders have various ways to evaluate your loans and have different interest rates. By using the loan calculator, you can easily see who has the best car loan offer.
Do not forget to consider the terms of payment.
Step 4: Check the eligibility and requirements
Even before you start processing your loan, you must check your eligibility and requirements for a smooth and fast transaction.
Step 5: Online application
While it is now convenient to make transactions online, be sure you are dealing with legitimate lenders on a secured site to keep your information secured. Have your documents in soft copies for a more convenient transaction.
Step 6: Wait for a confirmation
Once you receive a copy of your contract, you can take home your car and start repaying your loans diligently.
If you still need additional cash for your down payment, you can get it from the best online lending company. Just fill up the online loan application form on Cash Mart’s website and receive your cash within the day.