If you are looking for an Auto loan in the Philippines, we got the answer for you. There are so many ways to applying credits, but each financial institution has a different rate so you have to compare them before you decide.

While financial organizations compete against each other for the lowest rates, it is difficult to applying credits from a bank. If this does happen, what you may do is to apply for an Auto loan from a non-bank institution. No credit history is required for a consumer who buys a car from automotive dealers.

Today we’ll try to answer most of your questions about buying vehicles using borrowed funds.

General General terms: what is an Auto loan and who can get it?

An Auto loan is money that is issued by a financial institution, meaning that the institution will front the money and pay for the automobile, and you’ll paying it monthly with interest. Anyone who is of legal age who has the capacity to pay can avail of a Motor credit.

But Motor loans are different from Personal credits. If you apply for an Auto loan, you won’t take the cash. The bank will transfer funds directly to the seller. Legally, the vehicle belongs to you, but you cannot sell it until you pay borrow.

Terms of Auto loan different banks

Top five banks which offer Motor credits in the Philippines. Our sample here is based on 20% down payment and the full value of PHP 1 million, which will be paid within 60 months. We’ll no longer include HSBC and other international financial organizations.

Here is a comparison chart:

in 60 MONTHS
METROBANK ₱1000000 20% ₱800000 ₱16,278 ₱976,716 8,15%
BPI ₱1000000 20% ₱800000 ₱17,374 ₱1,042,439 10,95%
BDO ₱1000000 20% ₱800000 ₱17,393 ₱1,043,636 11%
EAST WEST BANK ₱1000000 20% ₱800000 ₱24,237 ₱1,454,241 26.6%
SECURITY BANK ₱1000000 20% ₱800000 ₱29,752 ₱1,785,164 37,63%

As you can see, these interests are low—and they will be lower if you pay a high down payment. You can also check for the other options online if you want. You may figure out the formula of the interest once you have filled out the forms.

Terms of Auto loan different dealerships

Auto loan from automotive dealers are similar with banks. In dealerships you are typically required to pay 20% of the costbut this is for Brand New vehicles only. Different dealers have different Interest rates. For example:

  • Toyota dealers in Philippines – TOYOTA BALINTAWAK Caloocan City, TOYOTA ABAD SANTOS, TOYOTA ALABANG Muntinlupa City, offer loans at 12% APR up to 5 years.
  • Chevrolet dealers – in Philippines – Chevrolet Alabang (Muntinlupa), Chevrolet Commonwealth (Quezon), Chevrolet Makati, offer loans from 10.7% APR up to 5 years and free warranty service up to 2 years.
  • Honda dealers -offer loans with the lowest DP of 15%, but the interest rate is higher-16.7% per annum up to a term of up to 5 years.

No automotive dealers in the Philippines or lenders offer loans for used cars, meaning that if you search these automobile options, you need to borrow from banks or online financiers. Just type finance for car near me in Google and you should find one.

There is no fixed price of interest in automotive dealers in the Philippines, each car manufacturer has a different rate in percent, but prepare to pay at least 30% in interest in duration of 48 months.


Conditions for granting loans through credit unions or cooperatives

If you applying borrow via non-banks and lenders, the interest rate varies between 6% and 21% per year.

Overall, you are paying more than 100% of what you borrowed originally. Also, you cannot apply Auto loan if you have a low or poor salary rating. Credit unions only deal with those who have decent employment, but not with poor individuals who have no jobs.
Consider the following examples:
Paglaum Multi-Purpose Cooperative provides loans with a maximum of 500,000 PHP up to 36 months at 1.75% per month. An important condition is that the borrower must be a member of cooperative for at least 3 years.
Gata Daku Multi-Purpose Cooperative: interest rate of 15% – 20% APR, up to 5 years, the maximum amount 500000 PHP. Requirements for borrowers – with an ATM or any savings account in a cooperative of at least P500.00 balance remaining.
DCCCO MultiPurpose Cooperative grants loans at a record low rate of 0.5% per month – New Brand and 0.65% -1% per month – Used cars, up to 60 months. If lend amount of up to 300,000 PHP a guarantor is not required. Requirements for the borrower: a full member of the cooperative for 6 months.

Auto Loan: how the process works

To apply you need to follow these steps:

  1. Go to the banks or financial institutions
  2. Fill out the application form;
  3. Wait for approval;
  4. Pay the down payment;
  5. Issue the checks.

During the application, you have to provide documents such as your government ID, proof of billing and your proof of work and income. The formula to getting approved is to have the complete set of documents required.

One of the most common documents you’ll be asked for is your income tax return. You may also provide a Certificate of Employment to prove you have work.

The choice between banks or dealer financing

The choice between banks and lender deals is dependent on your situation. In America, like, in Bank of America, your borrow money depending on your credit score. This is an essential rule.

Other financial institutions have no credit check, which is why it is great because you can also borrow from car dealerships. This is a gap that is usually exploited, or a gap that other companies can fulfill

However, it is difficult to getting approved a bank Auto loan. Also you may use a credit finder online to make this process easier.

If you want fast approval for deals, especially if you aren’t employed, you have to get a Motor credit from the automotive dealer because they no credit check as banks. Interest may be higher, but it is easier to process.

Is it possible to get an Auto loan with a bad CI?

No, you cannot get approval from banks in the Philippines if you have a poor credit rating, so you need to pay off your debts first. You should not have a bad credit rating.

The only way you can get a Vehicle credit with bad credit score is from lending institutions. It is great to know that there are independent lending companies that can help you. However, you’ll have an agreement that they will charge you interest. You need to honor that agreement or they’ll l get your automobile after the grace period of you not paying.

Who can use Auto loan?

Anyone can apply for Motor loans with high percentage of success. While it is true that you can applying Personal vehicle and use that money to buy an automobile, it is better to apply for an Auto loan.

Here are the advantages of Motor loans over Personal credits:

  • The bank knows you are buying an asset so they have better support
  • The bank has a tie-up with the dealership and you get better rates.

Quick instructions on how to get approval

To get a high percentage of approval, you must have a good or excellent borrow standing with zero issues of bad debt, plus you should have proof of income and capacity to pay.
Some tips before you apply:

  1. Open a bank account where you want to be credited– make sure your bank has money, not zero balance, and that you are saving without a lot of withdrawal going on.
  2. Use a credit card – use this card in all your purchases and pay them on time; specially if no credit history
  3. Stay in your job – make sure you have at least six months to one year of tenure in your job before apply; it is important for financial organizations to know that you have a regular employment status
  4. Prepare all the requirements– you should have proof of residence, proof of income, government ID, plus income tax return documents

You also need to talk to people you know who already applied for a loans and submitted their requirements. These people may give you advice how to go about it, and what your best options are without going to the banks.


If you need more money to refinance your borrow, you have to apply from other banks or lending institutions to pay for your used automobile.

There are only a few banks and financial institutions that offer refinance assistance like Maybank, PNB, Asialink and others. In the Philippines, second-hand cars do not have a lot of value and in the event of default, financing institutions are more likely to get the automobile from you and sell it profitably.

See below for comparison.

  • Maybank – the maximum amount is 60% of the estimated value of the automobile. The maximum period is up to 48 months at 1.5% per month.
  • Asialink offers up to 80% of the market value of car at 1.25% per month
  • PNB – up to 75% of the appraised value at 10% per annum. The maximum age of the vehicle is 7 years.

The way a refinance process works is simple—a company will pay the original party that loaned you your car so you can avoid deferment. Then, they’ll l take your automobile as collateral. If you fail to pay, the deferment process will begin.

If you miss out on your payment after your grace period, they’ll take your car.

Sometimes, your car insurance will also have something to do with the refinancing. If your automobile is not insured, you may be asked for an insurance to ensure that the company gets money if you ever get into an accident.


Detailed information about deferrals, advance payments, and credit duration

The standard car credit duration in the Philippines is up to 60 months for Brand New and 48 months for Used cars.
The minimum down payment that you can make is 10% – Brand New and 30% – Pre-owned vehicles. If you ever get into a situation where you already have enough money to paying off the borrow, you can pay all your debt all at once. The interest for the remaining balance will no longer be paid.

However, financial organizations will charge you what is called an advance payment or closure fees. The cost of this closure fees varies and could start at 3%.

The best institutions where you can apply for an Auto loan are the big banks. Examples of these are BDO, Security Bank, HSBC, Metrobank, BPI and others.

An Auto loan for business

Easy way to borrow money for an automobile is if you are in business, provided that you may show your business registration. Auto loan rates for business purposes is the same with a personal Auto loan. However, it is easier to get approved you are a business with proof that your business is profitable.

Trends in the Auto loan market this year

Auto loan in the Philippines is now at a stable state, which means that there is no significant trends this year. When many automotive dealers and banks have similar rates, you can always expect to have these rates lowered sometime in November of each year.

The reason behind that is that new models are coming out, and the automotive dealers, which have lots of stocks, want to dispose of their automobiles to give way to the new models.

When November comes, you may buy a vehicle with as little as 10,000 PHP down payment, and pay for the rest in a matter of 60 months. Now, since your down payment is too small, expect to have a higher monthly amortization rate.

Why can I refuse an Auto loan?

Approval vs. disapproval, is it profitable to take an Auto loan?

Yes, there are times when Motor loans are not excellent solution in the Philippines, you’ll not be approved if you have not had a permanent job in the last 2 years. Lots of questions will be asked of you. The country does not have a published credit rating system, like in Bank of America, so you’ll never really know if you’ll be approved or not.

Banking offers vs. other solutions, how do they compare? Remember that your vehicle purchased using borrowed funds, is not a lease, but your property, and you’ll paying interest rates, paying insurance and additionally bear the cost of servicing the car.


Isn’t it a profitable Vehicle lease?
Car rental – this is when your creditor purchases the vehicle of your choice and then rents it out. You pay the creditor fixed monthly payments, and you’ll not be responsible for the maintenance and repair of the vehicle throughout the term of its rental. You also do not need to have large sum of money as a down payment – 20% -30% of the cost of the automobile. If you rent an automobile, you may use it without wasting time on accumulating a down payment. And if you have money – you could spend it on other needs.  
Another alternative to an Auto loan is a Mortgage. In this option, you do not leave the vehicle as a guarantee, but leave your real estate as collateral. The most important advantages are the lowest interest rates and a longer term than a Motor credits. As described above, the maximum period for buying an automobile using borrowed funds is 60 months or 5 years, and the maximum mortgage term can reach 30 years. This will allow you to buy a more expensive vehicle and pay reasonable monthly payments. However, there are a big cons – a finance organization will be able to sell your home in case you cannot pay your debt.

One of the best tips we can give you today before you applying Vehicle borrow with the lowest rates is to get your finances in order. You have to settle your debts, and make sure that you have a stable income.
You should also have a source of income before you apply, as this is how the banks will assess your capacity to pay. If the options here are not enough, you can always search online and type finance for car near me in Google.

Good luck!