How to get approved for a car loan in the Philippines?

Updated Aug 04, 2020

In the article, will provide you with helpful information about how to get approved for a car loan in the Philippines.

Owning a four-wheeled model is everyone’s dream. However, not all are fortunate enough to buy the car of their choice. Thankfully, easy credit is one of the big drivers behind the explosive growth in sales in the current auto industry and simultaneously helps budget-conscious car buyers get your dream car more effortlessly.

car finance philippines - applying for a car loan to get your dream car soon

Apply for a car loan helps budget-conscious car buyers get their dream car more effortlessly

Taking out a car loan is now a bed of roses when banks are more willingly lending out money with more flexible terms and payments. However, for the first-time purchaser, seeking for best car loans in the Philippines can be a daunting task.

1. How to get approved for a car loan in the Philippines

Before applying for an auto loan, make sure you – a resident of the Philippines can meet the following requirements:

  • Age: 21 - 65 years old
  • Minimum monthly household or family income ranging from P30,000 to P50,000
  • For Overseas Filipino Workers (OFWs), the beneficiary must be a resident of the Philippines.
  • You have to be a regular employee for at least 2 years.

Meet all those minimum requirements? Now, come to the dealer to take home your dream car.


In our country, most car dealerships go into partnership with a bank

In the Philippines, most car dealerships go into partnership with a bank while some have their own financing arm. "In-house" financing (obtaining car loan at car dealerships) guarantees easy processing, fast approval, free registration, chattel mortgage and insurance as well. Occasionally, you can gain promos like zero-percent interest (for one-year periods only), low-down-payment schemes, or straight monetary discounts.

Anyhow, car dealers still need to make money, so opting for in-house financing normally costs 4 - 5% more than bank loans. In fact, bank loans always offer better rates. Sometimes, this amount is waived for the benefit of first-time buyers. Therefore, just limit your choice to something inexpensive, an Alto or Mirage for example.

Even with a quite low salary, you can get through a car loan in the Philippines with a monthly payment of under P10,000. Additionally, paying a one-month advance can help you save some of your hard-earned money.

>>> Besides car loan, car insurance is also a major concern of Filipino car buyers. Click here for a thorough guide on car insurance in the Philippines.

2. How to compute chattel mortgage fee?

Chattel mortgage is also a type of car financing in the Philippines. Chattel mortgage fee is what you pay the bank in exchange for taking out a secured loan. Most car loans in the Philippines are secured, that is to say if you miss a certain number of monthly payments, the bank has the right to repossess your vehicle. Once you completely repay the loan and interest rate, the mortgage will be cancelled.

Chattel Mortgage is a type of car finacing in the Philippines

Chattel mortgage is also a type of car financing in the Philippines

Normally, you can also avail a myriad of balloon or residual value options ranging from 0 - 60%. The value is determined by on kind and condition of your vehicle. 

>>> Top 5 low monthly payment cars in the Philippines 2018

3. Best banks for auto loan in the Philippines

Have a look at the list of leading banks offering car loan in the Philippines with lowest interest rate.

Best banks for auto loan in the Philippines
 Bank Name Interest Rate (% per year) Effective interest rate (% per year) Total Interest Over Loan Period Monthly Repayment
BPI 5.21 9.68 P87,528 P17,987
BDO 5.63 10.43 P94,584 P18,183
RCBC 17.91 30.46 P300,888 P23,914
PNB 5.35 9.93 P89,880 P18,052
Eastwest 5.83 10.78 P97,944 P18,276
Unionbank 5.77 10.68 P96,936 P18,248
Metrobank 5.07 9.44 P85,176 P17,922
Security Bank 4.79 8.93 P80,472 P17,791
Chinabank 5.49 10.18 P92,232 P18,118
SACC 15.60 26.91 P262,080 P22,836

As you can see from the table, Metrobank is one of the banks having lowest interest rates this year. Click here to learn more about Metrobank car loan promo 2018.

Metrobank car loan promo in the Philippines - one of the best bank having lowest interest rates 2018

Metrobank is one the the banks having lowest interest rates this year

After having compared offers from those banks, apply at your chosen one by submitting the necessary car loan requirements that can be found on its official website. Generally, documents needed include:

  • An accomplished application form;
  • 1 - 2 valid IDs or a copy of your IDs;
  • Income documents depending on your employment status.

As usual, processing time is within one banking day and additional documents will be submitted after approval.

In the end, we want to jog your mind that never underestimate the importance of promos, but you have to crack the numbers to decide whether they're worth it.

In addition, if you don't mind shop for a second-hand model, you can find some great deals on repossessed cars at the bank foreclosure lots. Better still, you can also inquire about bank financing on the spot.

Wish you to find your best car and best auto loan in the Philippines with some advices from!

>>> Click to learn more car buying tips on