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How Limited is the PNB Auto Loan?

Philippine National Bank was originally a government-owned banking institution which was established on July 22, 1916. The primary services it used to render was to provide support to the Philippine industry and agriculture. Filipino farmers could then apply for loans with yearly interest rate up to 10%. Now, PNB provides wider variation of loans for Filipinos as one of the largest commercial banks in the country.


PNB Auto Loan Requirements

Among several loans, PNB offers Sure Wheels Auto Loan to Filipino citizens and permanent residents who want to purchase new and pre-owned cars. If you are a first time car owner, you have to be very keen when it comes to choosing an auto loans to save yourself from financial dilemma.
The borrower must be 21 to 65 years old who have been earning a regular income for at least two consecutive years.
If you are a Filipino locally employed, you have to submit your latest ITR and COE with compensation. By chance that you are a self-employed as a freelancer or an entrepreneur, you will be required to produce your ITR along with an Audited Financial Statement, previous three months’ bank statements and government released business papers. For corporations or partnerships applying for a car loan, PNB will require a Securities and Exchange Commission certificate, By-Laws and Articles of Incorporation, and a Secretary’s Certificate aside from the ITR and bank statements.

PNB Car Loan Features

For PNB used car loan, you will have to pay a higher interest rate ranging from 12.40% to 33.70%. Like most banks offering auto loans, PNB has two types of interest rates you can choose from.

Add-on-Rate (AOR)

AOR is the interest rate charged on your loan if you pay on your due date, which is usually a month after your downpayment.

Effective Interest Rate (EIR)

EIR is the interest rate charged to you if you pay your first amortization together with your downpayment or if you pay your first repayment one month in advance. The next payment is still after a month.
Let’s say your first repayment is on December 20, yet you paid on November 20 with your downpayment for your brand-new car. If your loan tenure is 24 months, your interest rate will be 9.74%. Your next payment is still on December 20. If you pay your first amortization on December 20, your interest rate will be 10.46%.
The benefit of EIR is the lower interest rate, especially if your loan tenure is 24 months or longer. The advantage of AOR has less initial cash out. Comparatively, in the long run, you can save more with EIR.
As for the loan term, the auto loan for brand new cars can stretch up to 60 months with an interest rate ranging from 5.29% to 28.01%. As for the used car, you can only get a loan for 48 months with an interest rate of 7.97% to 33.70%. The older the car, the shorter the loan term.
The loanable amount also depends if you are getting a loan to finance a new or pre-owned car. The minimum amount you can borrow for a new car is P300 000 while only P150 000 for the used cars. You have to cash out your brand new car with at least 20% of its purchase price. PNB requires at least a 25% downpayment for pre-owned cars. You may check it first using the PNB Auto Loan calculator. 

PNB Car Loanable Amount

While waiting for your PNB Car Loan status, don’t forget to set your mind on the allowed loan amount you can get. 

 Brand New CarUsed car
Minimum Loanable AmountPhp 300,000Php 150,000
Maximum Loanable Amountup to 80% of the cash list or purchase priceup to 75% of the appraised value

PNB Auto Loan Benefits

  • Equal monthly amortization means your monthly repayment is fixed. There is no need to worry about the yearly changes in your budget. You can also pay through Automatic Debit Arrangement and Post Dated Checks. However, do not forget to ensure your bank account has enough cash to finance your repayment to avoid late charges.
  • Partnership firms and corporate companies are eligible for a car loan. If your company needs a car service, then this is a good opportunity to have one.

PNB Auto Loan Limitations

  • If you are looking for a loan wherein you can use your own car as collateral, then this loan is not for you. You better opt for other lenders, especially licensed private.
  • A comprehensive car insurance policy is required. This means you have to pay for car insurance with wide coverage and not just Liability Insurance.

There are various auto loans offered to Filipinos by banks and financial institutions. Be a smart buyer and choose the best car loan that fits your needs, not your whims.
On the other hand, if you need a quick cash loan to have your car fixed or to put in some add-ons, apply for a loan now from Cash Mart.