How do car loans work in the Philippines? (2026)

This guide is for first-time buyers financing a brand-new car from a casa. It covers who lends, what you need to apply, how long approval takes and what the loan really costs once fees and insurance are counted. Rates below come from the banks' own pages, last checked in November 2026, and they match the live charts on our financing page.

Bank loan or in-house financing: which is better?

A bank auto loan is the standard route and usually the cheaper one; dealer or in-house financing trades a higher rate for speed or a lower downpayment. Either way, the dealer typically helps you file the application.

"All-in" and "low DP" promos often move cost from the downpayment into the monthly payment. EastWest, for example, says its published rates do not apply to dealer all-in promos. Compare offers by total amount paid and by effective rate, as explained in our guide to add-on rate versus effective rate.

How much is the downpayment and how long is the term?

Expect 20% down and a term of 12 to 60 months for a brand-new car. BPI is the outlier at 15% minimum, since it lends up to 85% of the price. Metrobank, Security Bank, RCBC, EastWest, Chinabank, PSBank and Bank of Commerce all cap the loan at 80% (20% down).

A bigger downpayment (30-50%) lowers both the monthly amortization and the total interest, because add-on interest is charged on the amount borrowed. A longer term lowers the monthly payment but raises total interest steeply.

Term	Monthly	Total interest
12 months	₱70,658	₱47,896
24 months	₱37,237	₱93,688
36 months	₱26,119	₱140,284
48 months	₱20,635	₱190,480
60 months	₱17,402	₱244,120

Average of the total add-on rates published by the lenders we track for each term (6 or more lenders). Estimates, not offers; fees such as chattel mortgage and insurance are extra.

What are car loan interest rates right now?

As of November 2026, published add-on rates for a brand-new car are about 5-7% for 12 months and 27.5-32.5% for 60 months. An add-on rate is the total interest for the whole term as a percentage of the loan, not a yearly rate.

These are rates paid in arrears (first payment a month after release). Several banks list slightly lower rates if you pay one month in advance. Chinabank and PSBank do not publish rates; PSBank says its rate is the prevailing one at booking. Bank of Commerce's figures are derived from its own online calculator, which it labels indicative.

• Bank of Commerce27.54%
• East West Banking Corporation30.24%
• Metropolitan Bank & Trust Company30.26%
• Bank of the Philippine Islands31.01%
• Rizal Commercial Banking Corporation31.01%
• Rizal Commercial Banking Corporation31.01%
• Security Bank32.52%

Total add-on rate over the whole term, as published by each lender (latest check 13 November 2026). Lower is cheaper. Rates change and depend on your profile; see the calculator for your numbers.

BPI publishes the effective rate beside each add-on rate: 31.01% add-on over 60 months equals an effective 11.19% a year. See individual bank pages for details, for example BPI, Metrobank and Security Bank.

What are the requirements for a car loan?

Every applicant needs a signed application form, two valid IDs and proof of income; the income documents depend on how you earn. If you are married, your spouse signs too. The list below follows BPI's published checklist, which is typical of the big banks.

Employed

• Certificate of employment showing salary, position and length of service
• Latest one-month payslip, or three months of payroll account statements
• Commission earners add their latest ITR and bank statements showing commission credits

Self-employed

• DTI registration or Mayor's Permit
• Latest ITR with financial statements
• Six months of business account bank statements
• Trade references: at least three major suppliers and three major clients

OFW

• Latest contract or certificate of employment, plus three months of payslips
• Proof of remittance and passport
• Land-based OFWs on vacation: return ticket and renewal contract
• Seafarers: crewing manager details and an affidavit of marital consent with special power of attorney

Income minimums vary. BPI asks for ₱30,000 monthly household income and borrowers aged 18 to 70 at loan maturity; Security Bank's car loan page states a joint monthly gross income of ₱100,000. Banks authorise themselves to verify all of this, so keep employer and bank details accurate.

How does the car loan approval process work?

From complete documents to approval usually takes one to a few banking days; release of the car then depends on the dealer and LTO registration. RCBC says most applicants hear back within one working day, and Security Bank states one banking day for brand-new car loans.

1. 1

   Pick the unit and get a quote

   Get a written quotation from the casa showing SRP, discounts, and the amount to be financed.

2. 2

   Apply and submit documents

   Apply online, at a branch, or through the dealer's bank agent. Submit IDs and income documents.

3. 3

   Credit investigation

   The bank verifies your employment or business, may call or visit, and checks your record with credit bureaus.

4. 4

   Approval

   You receive the approved loan amount, term and rate, usually by SMS, email or through the dealer.

5. 5

   Sign and pay the downpayment

   Sign the promissory note, disclosure statement and chattel mortgage, and pay the downpayment and fees to the dealer.

6. 6

   Purchase order to dealer

   The bank sends a purchase order or letter of guaranty committing to pay the dealer the loan amount.

7. 7

   Release

   The dealer registers the car with the LTO under your name, with the bank's mortgage noted, and releases the unit.

The credit check draws on the Credit Information Corporation, the state credit registry set up under Republic Act 9510, which banks report to. Late credit card or loan payments show up there.

What is pre-approval?

Pre-approval (some banks call it pre-qualification) means the bank assesses your income and credit before you choose a unit, so you know how much you can borrow. It helps you negotiate with the casa as a near-cash buyer. Ask how long the approval stays valid, since the final rate is fixed only at booking.

How do I check my car loan application status?

Ask the dealer's bank agent first, then the bank's own channel using your reference number. Banks handle this differently:

1. Security Bank runs an online status checker and also answers through its Messenger chatbot; see its Help Center.
2. BPI sends an SMS when an online or branch application is approved and asks you to visit a branch or Loans Business Center.
3. BDO offers a Quick Loan Inquiry for existing loan accounts; for a pending application, its contact centre is the usual route.
4. Other banks: call the hotline or email the auto loan unit with your reference number and full name.

If you have heard nothing after a week with complete documents, ask whether anything is missing. A common delay is an unverified employer or bank statement.

What fees do you pay besides the downpayment?

Expect chattel mortgage and documentation fees, documentary stamp tax and the first year of insurance, usually paid before release. Metrobank publishes its list: notarial fee ₱300, handling fee ₱1,500, documentary stamp tax of ₱1.50 per ₱200 of the loan, plus a registration fee for the security interest. On an ₱800,000 loan that stamp tax alone is ₱6,000.

The registration is for the chattel mortgage, which makes the car collateral until you finish paying. Since 3 February 2025 these are filed in the Land Registration Authority's online Personal Property Security Registry, where a new notice costs ₱380 under LRA Circular 02-2025. Your OR/CR will show the car as encumbered to the bank.

Is insurance required?

Yes. Lenders require comprehensive insurance for the whole loan term, with the bank named as payee for total loss or theft. RCBC's Auto Loan Plus bundles insurance; on its Regular Auto Loan, insurance is charged separately. See CTPL and comprehensive insurance.

How much does a ₱1 million car really cost on a loan?

At the median published 60-month rate, a ₱1,000,000 car with 20% down costs about ₱1.25 million before fees and insurance.

Monthly for 60 months on ₱800,000 at 31.01% add-on

₱17,468

Total interest over 5 years

₱248,080

Effective rate per year (BPI's published equivalent)

11.19%

The same loan over 36 months at the median 17.75% is ₱26,167 a month but only ₱142,000 in interest. Try your own numbers below or on the car loan calculator, and browse cars under ₱1 million.

Does Pag-IBIG have a car loan?

No regular one. Pag-IBIG Fund does not offer a standard car purchase loan. Its Home Equity Appreciation Loan (HEAL) lets qualified Pag-IBIG housing loan borrowers borrow against their home's net value and lists buying a vehicle among the allowed uses. If you do not have a Pag-IBIG housing loan, a bank or dealer loan is the practical route. Check the current HEAL rules with Pag-IBIG, since eligibility conditions can change.