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What to Expect When Getting a Car Loan in the Philippines

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Borrowing money to purchase costly property has been a norm in a developing country like the Philippines. Saving money to buy a hefty-priced property is a long road to take. Getting a loan will not only get you the property fast, but it will also improve your way of life. As a result, you can quickly return the loan you invested. That is very much true when getting a car loan in the Philippines.

What is a car loan?

Car or auto loans are a service where people borrow money from a bank or a financial institution to purchase a vehicle. Banks curated this type of loan specifically for buying cars or other vehicles. Thus, it will include specific services such as car registration and insurance coverage.

Keep in mind that banks or financial institutions will set forth procedures to ensure that borrowers will use the money loaned from them only for auto purchases. They will even partner with auto companies to provide the cheapest car loan deals.

Car loans will usually pay the auto companies in full so that the buyer will pay the loaning company instead. There are also options where the buyer will produce a downpayment to the car seller while the remaining balance will be paid as a loan to a bank.

Thus, when getting a car loan, it is best to reach out to the car seller and the bank that provides the loans, so you will know which is the best option to take.

How to apply for a car loan

To apply for a loan to purchase a car, you first need to find institutions that offer such a loan. You can go straight to the banks and see and compare the auto loans they provide. Here are our picks for Philippine banks that offer this type of loan to get you started on your auto loan research.

Banks That Offer Auto Loans

 

Bank Loan Term Loan Amount Down- payment Rate Approval Time
LDB 12 – 60 months 100,000PHP – Up to 80% of the appraised value   1.66% per month 1-3 banking days
PSSLAI 12 – 60 months 200 000 PHP – Up to 80% of the appraised value   13.52% – 15.5% APR 5 banking days
MayBank 12 – 60 months 100,000 PHP – Up to 70% of the appraised value   0.5-5% per month 1-3 banking days
PNB 12-60 months Brand new – 300,000 PHP

Used – 150,000 PHP up to 80% of purchase price

As low as 20% of purchase price 9.4 – 10.4% APR 1 banking day
ChinaBank Up to 3 years Brand new – up to 80% of purchase price

Used – up to 70% of appraised value

As low as 20% of purchase price 5.49% per month 1-3 banking days

 

To compute your monthly payments, it is best to use a car loan calculator. You can find a car loan calculator on a website like Upfinance. There you can set your desired loan term and input the interest rates and loan amount. Then, the site will reveal what your monthly payments will look like including the interest.

How to get approval for a car loan

To get approved for a car loan, you need to present the necessary documents. You must also prepare the amount of money required for the downpayment for the car. A piece of great advice is to seek a car loan from a bank with which you have a savings account. There is a great chance you will get approved for an auto loan through your bank.

Average Car Loan Requirements in the Philippines

The specific requirements differ for each bank that provides auto loans. However, the needed documents usually revolve around the following:

Loan Application Form

This is the form provided by the bank that issues the car loan. You will supply your personal information, your source of income, and other necessary information. The bank may also require you to get a co-maker/s, so they will also ask for their details. This document will only be valid once you and the co-makers have signed it.

Valid IDs

This can be any identification card that the Philippine government issues. It should have your full name, birthday, and address. The best type of ID to present when taking a car loan is, of course, your driver’s license. However, anyone can get a car loan even if they don’t have a driver’s license yet.

Proof of Billing

Banks asked for this document to verify where you live. The address stated on the bill will also be where the bank will send their auto loan payment collection letters to you. This document can be your most recent electricity, water, or internet bill.

Proof of Income

Lastly, banks ask for proof of income, so they know you can pay. This can be your certificate of employment. If self-employed, this document can be your Certificate of Business registration or your latest Income Tax Return.

They will also ask for at least three months of your income slips. If employed, you will need to submit a copy of your payslips for the last three months. If you are an OFW, you must submit your remittance slip over the previous three months.

Finding the best car loan in the Philippines

If you plan to get an auto loan, you want the lowest interest possible. It can be burdensome to sift through all the banks to find which offers the best car loan deals. Lucky for you, you are reading the right article.

We introduce to you the loan consolidation service, Upfinance. Here, you can see the list of car loans offered in the Philippines. You can easily compare rates and benefits to see which is the ideal bank to get your loans from.

Upfinance works with a large number of banking partners that are all registered in the Central Bank of the Philippines. Thus, you can be assured that you only deal with legitimate financial institutions.

Furthermore, Upfinance has an auto loan calculator where you can get an instant computation of your loans and monthly payments. So what are you dwindling about? Visit Upfinance today and get your auto loan asap!

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