A car loan is a type of secured loan used to purchase a vehicle, such as a brand-new or secondhand car. In the Philippines, car loans are popular as they help individuals and businesses finance vehicle ownership with manageable monthly payments. These loans typically require a down payment, collateral (the car itself), and involve interest rates and loan terms that vary by bank. Car loans may also require insurance coverage, including comprehensive motor insurance and compulsory third-party liability insurance.
Car Loans in the Philippines
Car loans on the Philippine market can finance both brand-new and used vehicles. Loan terms usually range from 12 to 60 months, with some banks offering terms up to 84 months. Interest rates vary widely, influenced by factors like loan amount, term, vehicle type, and borrower profile. Banks commonly require a down payment of around 20% of the car price. Insurance is mandatory for the vehicle, with banks often including free insurance coverage for a period or offering discounted multi-year insurance plans.
Top 15 Banks for a Car Loan in the Philippines 2026
Security Bank
Vehicle type: Brand-new and used cars
Loan amount: Up to 80% of the selling price for brand-new cars, about 70% for used cars
Down payment: Generally 20%
Interest rate: 6.02% to 37.63% depending on credit profile and loan term
Repayment terms: 12 to 60 months
Features: Security Bank has partnered with Mitsubishi Motors Finance Philippines to offer car loans at all Mitsubishi dealerships nationwide. It supports a fully digital loan application through the AutoDeal platform, making the process faster and more convenient. Security Bank is known for flexible payment terms and customer-friendly services.
Features: BDO is one of the biggest banks offering comprehensive car loans with optional insurance plans. Known for fast processing and branches nationwide.
Vehicle type: Brand-new cars, secondhand cars, and brand-new light trucks
Loan amount: Details provided upon application
Down payment: 20% to 50%
Interest rate:
Standard: 6.56% to 31.76%
With one-month advance: 5.68% to 30.57%
Repayment terms: 12 to 60 months
Features: Fast approval process; excellent customer service; can apply completely online by calculating loan, filling form, and submitting; partnerships with Chevrolet, Nissan, Honda, and Mercedes Benz including promo offers.
Step-by-Step Guide to Getting a Car Loan in the Philippines
Determine your budget and the type of vehicle (brand-new or secondhand) you want to buy.
Research and compare car loan offers from different banks considering interest rates, loan amount, tenure, and additional fees.
Prepare necessary documents including valid IDs, proof of income, and car information.
Apply online or visit your chosen bank’s branch to submit your loan application and documents.
Wait for loan approval, usually within a few business days.
Review and sign the loan contract and complete any insurance requirements.
Receive your loan proceeds and secure your vehicle ownership through registration.
Car Loan Requirements for Borrowers and Vehicles
Borrower must be a Filipino citizen or foreign national residing in the Philippines with a stable source of income. Age typically between 21 and 70 years old at loan maturity.
Proof of income such as employment certificate, payslips, or business financials (2 years for self-employed).
For brand-new cars, proof that the vehicle is brand-new and rarely used (e.g., mileage below 2,500 km).
For secondhand cars, vehicle age limits apply (commonly up to 6 to 11 years, depending on bank).
Comprehensive motor vehicle insurance and compulsory third-party liability insurance are mandatory.
What is the Best Bank for a Car Loan in the Philippines? How to Choose?
Choosing the best bank requires assessing several factors:
Interest Rates: Compare the annual percentage rates or add-on rates across banks to get the most affordable cost over time.
Loan Term: Select a term that balances manageable monthly payments without extending excessive interest payments.
Down Payment: Confirm the required initial payment fits your budget.
Loan Amount: Ensure the maximum loan covers the price of your vehicle type and model.
Additional Fees: Check administrative, processing, and insurance fees to avoid surprise costs.
Loan Processing Time: Faster approvals help if you need the loan quickly.
Customer Service and Accessibility: Local branch presence and responsive service are critical for smooth loan management.
Insurance Offerings: Some banks provide free or discounted insurance, which can save costs.
Reviews and Reputation: Seek feedback from current or past borrowers for reliability and satisfaction insights.
A Comparison of the Best Banks for a Car Loan in the Philippines
Bank
Vehicle Type
Max Loan Amount
Term (months)
Interest Rate
Insurance Required
Contacts: phone, e-mail, address
Security Bank
Brand-new & used
Up to 80% (new), 70% (used)
12-60 (new), 12-48 (used)
6.02%-37.63%
Free 1-year car insurance
+632 8888-2555 [email protected] 6766 Ayala Ave, Makati City, Metro Manila
Frequently Asked Questions About Car Loans in the Philippines
Can I get a car loan if I have a bad credit history?
Having a bad credit history may result in loan denial or higher interest rates. Some banks may still consider applications if additional collateral or guarantors are provided.
Can I negotiate for a lower interest rate?
Yes, depending on the bank and your credit profile, you can negotiate for better terms, especially if you have a stable income and good credit standing.
What documents are required to apply for a car loan?
Typically, you will need a completed application form, valid IDs (passport, driver’s license, UMID), proof of income (salary slips, tax returns), and information about the car to be purchased. Foreigners must also provide Alien Certificate of Registration and work or residence permits.
Is it possible to apply for a car loan online?
Many banks offer online applications or loan calculators for pre-qualification. Final approval may require branch visits or can be done online depending on the bank.
What is the typical minimum and maximum loan term?
Loan terms usually range from 12 to 60 months, with some lenders offering up to 84 months especially for eco-friendly vehicles.
What is the usual down payment requirement?
Down payments range from 15% to 50% of the car price. Promotional offers sometimes include zero or low down payment options.
Is insurance mandatory for a car loan?
Yes, most banks require comprehensive insurance and third-party liability insurance as part of the loan terms.
Can I have multiple car loans at the same time?
It is possible if your debt-to-income ratio allows and previous loan obligations are in good standing.
What factors impact loan approval chances?
Approval depends on stable income, good credit history, debt-to-income ratio, and presence of collateral or guarantors.
Can increasing the down payment reduce monthly payments?
Yes, a larger down payment lowers monthly amortization and total interest paid by reducing the loan amount and/or term.
Best online loans
Interest
Loan amount
Term
Borrower age
SEC registered
Get Cash
from 0%
₱1,000 — ₱50,000
up to 12 months
20 — 70 years
SEC Registration No. CS201908275 SEC Certificate of Authority No. 2990
Get Cash
Get Cash
APR 143% per year
₱1,000 — ₱20,000
from 61 to 183 days
22 — 70 years
Registration № CS201726430, CA №1181
Get Cash
Get Cash
APR 145%
₱500 — ₱20,000
from 3 to 6 months
22+ years
SEC Registration number: CS201953O73., Certificate of Authority №1254
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