Home / Car Loan

Car Loans in Philippines with Lowest Rates

If we speak about special loan types, a car loan is definitely one of such types. Nowadays, this type of loan is becoming more popular, due to some factors. Transportation problems, too heavy traffic, the growth of cities lead are the main reasons why owning a car is necessary.

However, many people in the Philippines cannot purchase a car, even if a used one. That’s why a car loan is a perfect solution for them.

Car Loan Requirements

It is clear that in the case of an auto loan, a significant sum of money is involved. That’s why the company`s requirements for each applicant might be much higher than the requirements in the case with a payday loan. For example:

  • The age range is different than the one for a payday loan. Usually, the age range varies, but the most common is from 21 to 65 years old. It is for a reason: the company needs to make sure you are able to repay the loan.
  • The applicant should be employed for at least two last years or have proof of constant income. Here, one more requirement comes into force: the minimum salary. It should be not less than 30,000 PHP. However, the sum might differ depending on the vehicle price. If you want a new luxury car, the requirements are going to be higher. Once more, it is made to ensure that you can repay the loan.
  • The applicant should be either a Filipino citizen or a permanent resident of the country.
  • Those applicants who are applying for a loan with a bank should save some money for an upfront payment. As a rule, the sum might vary from 20% from the vehicle price and above. It is recommended though to make the down payment in the amount one can afford. The more one pays at the start, the less the repayment sums will be.
  • Some companies would request the new car as collateral. If the borrower doesn’t repay the loan, the company becomes the car owner.

Auto Loan Calculator

Before applying for a loan, the applicant needs to assess how much he/she can ask for. One should remember that along the loan body, interests should be paid. Some people under-evaluate the sum and as a result, have issues with the loan repayment.

That’s why all the companies that issue an auto loan have a special calculator on their websites. The calculator form might differ. However, the main fields are always present:

  • The price of the new car;
  • If the person is applying for a loan with a bank, there will be a special section for the down payment sum;
  • Further, the applicant will be asked for the loan term. It is recommended to select the period that allows repaying the loan conveniently. However, the longer the selected period is the higher the interest rate will be. It is worth mentioning that the repayment period might vary from 12 months up to 6 years if the applicant is purchasing a new car, and from 1 to 4 years if the applicant wants to buy a used car;
  • In the last window, you will see the sum to be repaid. Usually, it is the sum with the interests included. Like this, the applicant can avoid complicated calculations and doubts. Everything is provided.

Pros and Cons of Car Loans

A car loan is a very convenient solution for those who need a car but cannot afford to buy it immediately. Of course, one should consider all the pros and cons of such a loan. Mostly, they depend on financing sources. Potential applicants can check all the advantages and disadvantages of such a decision further in our guide to car loans.

Hence, the main advantages and disadvantages of car loans, based on the sources where people get them.




Car Dealers



Credit Unions



How to Apply for Car Loans?

The application process depends on where you are going to apply for the car loan. If it is a bank, you would need to come there in person to submit the needed documents and to sign all the requested papers.

Some companies though offer a convenient option to apply online. In such a case, you need to scan the needed documents and to send them online.

The processing of each loan application depends on the policy of each selected company.


Can I get 100% funding to buy a car?

Usually, all the lending companies would request a down payment before processing your loan application. The down payment sum might vary from 20% from the vehicle price and higher.

Do I need a guarantor when applying for a car loan?

Some companies will ask for a guarantor. Others would issue a loan without any guarantor. In the second case, there are two options:

  • The bought car will be used as collateral;
  • The bought car is not used as collateral.
  • The best option is a company that doesn’t need a guarantor and doesn’t request collateral. Though, the interest rates might be higher in such a case.
Is my credit score affect the interest rate?

If you are applying for a loan with a bank, the credit score should be above 700. You can apply even with a lower score, but the lower the credit score is the fewer chances you have.

If you are applying for a loan with a lending company, your credit history might be not considered at all.

How doe interest rates work?

If you are applying for a car loan, you will need to pay simple interests. These interests are calculated on the borrowed sum only. This is their main advantage in comparison with compound interests. Compound interests are calculated on the borrowed sum plus the interests generated from it.

Is it better to loan or buy a car?

Everybody decides for himself. If you can afford to purchase a car without getting a loan, it is recommended to do so. You will save significant sums of money because you will not need to pay interest. However, a loan allows you getting a new car even though if you cannot pay for it immediately.


All information provided here is given with the sole purpose to make you acquainted with the options of buying a car. It doesn’t have any aim to force or to incline you in any way to use one or another lending service or to make one or another purchase. We provide lending services reviews for a fee and do it only with a purpose to provide the readers with information that might be helpful to them.

Lenders Review

online loans logo
cashwagon logo
atome logo
moneycat logo