01

of 19

What is a car loan?

A car loan is a secured form of credit offered by banks and finance businesses to allow customers to purchase a vehicle and pay for it over a certain period of time on a monthly basis.

With the availability of a car loan, people with reliable income and/or strong credit histories can reduce their initial cash outlay by borrowing a certain amount of the cost of the car from an auto loan provider.

Loans are offered with set interest rates, which represent the extra costs you pay over the course of the loan term in exchange for the privilege of receiving the loan.

02

of 19

What are Interest Rates?

The amount a lender charges for each loan is known as the interest rate, which is frequently stated as a percentage of the principal sum loaned. An annual percentage rate (APR) is typically used to compute the interest rate. The amount you actually pay over the course of your loan’s term is determined by its interest rate. All vehicle loan interest rates in the Philippines are offered as fixed rates for financing purposes.

Top 14 Car Lenders in the Philippines

 Car loans are a practical way to get a car without using up all your savings because they require monthly payments rather than fixed payments. The ideal way to finance a car is through a loan if you want to get the benefits of having a car while also maintaining a healthy cash flow. 

Here are the top 14 car lenders in the Philippines offering the lowest interest rates.

Car loans are a practical way to get a car without using up all your savings because they require monthly payments rather than fixed payments. The ideal way to finance a car is through a loan if you want to get the benefits of having a car while also maintaining a healthy cash flow. 

Here are the top 14 car lenders in the Philippines offering the lowest interest rates.

03

of 19

1. Security Bank Car Loan

Security Bank provides brand new car loans up to 80% of the sales price and used car loans up to 70% of the assessed value with interest rates ranging from 6.77% to 37.63% APR and loan terms of up to 60 months.

Additionally, they provide pre-owned vehicles with interest rates ranging from 16.5% to 24% APR and financing lengths as long as 48 months.

Payment terms for brand-new vehicles run from 12 to 60 months, while those for used vehicles extend from 12 to 48 months with down payments as little as 20% of the purchase price.

04

of 19

2. RCBC Car Loan

The RCBC Auto Loan has a minimum loan amount of PHP 300,000.

• The down payment is 20%.
• Payment terms range from 12 to 60 months.
• The interest rate is 5.54 percent.
• Monthly amortization is low.
• Brand new interest rates range from 5.75 percent to 30.3 percent APR loan terms ranging from 30 to 60 months.
• Pre-owned interest rates range from 8.4 percent to 33.9 percent APR with a loan duration of up to 48 months.

05

of 19

3. EastWest Bank Auto Loan

EastWest Bank provides both new and used vehicles.

• Payment terms range from 12 to 60 months.
• Brand New – interest rates 5.9% – 31% APR loan term up to 60 months
• Pre-owned – interest rates 7.19% – 36% APR loan term up to 48 months

06

of 19

4. BDO Unibank Auto Loan

BDO Unibank car loans have excellent interest rates and can be approved within 24 hours. You can acquire a loan for a brand new or pre-owned vehicle.

Brand New: The maximum loan term for personal use is 5 years, while the term for business use is 3 years.

Pre-Owned: 4 years for personal use and 2 years for business use.

Brand New – interest rates 17.33% – 30% APR loan term 36 – 60 months. Pre-owned – interest rates 14.11% – 30% APR loan term 24 – 48 months.

Downpayment: 20%-40%

07

of 19

5. Maybank Philippine Car Loan

Maybank Philippines provides auto loan refinancing for both used and new vehicles.

Brand New – interest rates 12,48% – 18% APRloan term up to 60 months

Used Car– interest rates 18% – 20,76% APR loan term up to 48 months

Read More: All You Need to Know About Home Credit PH [2022]

08

of 19

6. Robinsons Bank Car Loan

Robinson’s bank Loan Amount for a car loan:

Brand New – Up to 80% of Net Cash Price

Used Cars – Up to 70% of the appraised value

Brand New – interest rates 8,6% – 10,2% APR loan term – 12 to 60 months

Used Cars – interest rates 16.7% – 22% APR loan term – 12 to 48 months

Down Payment: As low as 20% SRP

09

of 19

7. Producers’ Bank Auto Loan

Brand New – interest rates 6% – 9% APR loan term up to 60 months

Pre-owned – interest rates 8% – 14% APR loan term up to 24 months

10

of 19

8. UCPB bank car loan

UCPB offers both brand new and used car loans to the customers at:

Brand New – interest rates 9,95% – 11,43% APR loan term up to 60 months

Pre-owned – interest rates 9,95% – 14% APR loan term up to 36 months

11

of 19

9. BPI Auto Loan

BPI offers a new car loan at a 5.36% Interest Rate with Monthly Repayment of ₱ 9,673

12

of 19

10. Sterling Bank Asia

Sterling Bank Asia’s loanable amount is P100,000 and above. Loan Terms: 12 to 60 months (brand new) 12 to 48 months (Second Hand) with post-dated checks and an automatic debit arrangement as payment options.

Brand New – interest rates 14% – 19,04% APR loan term up to 60 months

Pre-owned – interest rates 19,74% – 26,65% APR loan term up to 48 months

13

of 19

11. PNB Sure Wheels Auto Loan

PNB offers loans for brand new and used cars with a monthly repayment of ₱ 9,671.

Brand New – interest rates 9,4% – 10,4% APR loan term up to 60 months

Pre-owned – interest rates 12% – 20% APR loan term up to 48 months

14

of 19

12. Metrobank Car Loan

Metrobank’s new car loan has an interest rate of 4.79% with a monthly repayment of ₱ 9,531.

15

of 19

13. Chinabank AutoPlus Loan

Chinabank AutoPlus Loans include exceptionally low-interest rates, low monthly amortization, longer payment terms, and a low down payment. They also offer affordable insurance premiums through China Bank Insurance Brokers, a subsidiary of China Bank.

A new car loan has an interest rate of 5.49 percent and a monthly payment of  ₱9,706. 

16

of 19

14. Union Bank of the Philippines Auto Loan

Union Bank Philippines’ brand new car loan interest is 5.61% with a monthly repayment of ₱ 9,736.

17

of 19

Car Loan Requirements in the Philippines

For employed applicants:

• Duly accomplished application form from your lender of choice.
• Valid government-issued I.D. with signature and photo such as Driver’s License, Passport, etc.
• The latest proof of billing
• Copy of Certificate of Employment or COE with compensation and latest income tax return (ITR).
• Three months’ worth of pay slips

For those who are self-employed or have businesses:

• Certificate of Business Registration with DTI for entities with sole proprietorship or SEC if under partnership/corporation.
• Latest ITR
• Latest financial statements such as Audited Financial Statements, Statement of Assets and Liabilities, Statement of Income and Expenses, bank statements, and/or photocopy of your passbook for the last three months.
• The latest proof of additional/other income such as lease contracts, certificates of deposits, and/or stock certificates.

Aside from the mentioned requirements, physical assets such as real estate and other owned vehicles can be utilized as additional proof of capacity to pay. Which also increases your chances of getting your car loan approved.

18

of 19

Considerations for a car loan

Purchasing a car involves more than just the cash outlay; it also involves paying for fuel, servicing, insurance, and amortization on the vehicle. These are all additional monthly expenditures that must be taken into account.

What kind of vehicle do you need for the trip; how many people will frequently ride in your car; whether you’ll be driving in the city or out in the country; and finally, should you buy a new or used automobile? It’s now easier than ever to buy a good used automobile with financing, so it’s something to think about.

If you are taking out a loan, your budget should always be within your means, with extra money necessary to cover expenses like fuel and maintenance. Stretching yourself too thin poses the risk of being unable to make payments, which could result in bank repossession, which somewhat results in the loss of your car but also affects your credit rating and makes it more difficult for you to secure loans in the future.

Use a car loan calculator to choose a car that matches your monthly budget. An auto loan calculator can estimate both the loan amount and the monthly payment for the car you are interested in. The outcomes of the various loan factors from affiliated institutions can then be compared.

Take considerable time gathering the required documents for your application. If you submit your application with legal documentation, only to have it denied due to a lack of reference documentation, and you then have to go through the entire application process again, it can be quite stressful.

19

of 19

Why are the interest rates on used cars higher than on new cars?

Used car loan rates are higher, but you can reduce them by making a higher down payment or paying the first month’s payment in advance. Used car interest rates are higher than those for new automobile loans because there is a higher risk involved.

As a result, the bank hopes that by charging higher interest rates, it will be able to recover as much of the loan as possible in the event of a repossession. Remember: Always keep your credit rating high to qualify for cheaper interest rates on vehicle loans.