Skip to content

2 Reasons Why Getting An Auto Loan in the Philippines May Be A Good Idea

Nowadays, a lot of people prefer buying cars in cash instead of applying for an auto-loan. 

This is acceptable, if you have enough savings to tide you over, but if not, your entire life savings may get depleted and you won’t have anything left for your emergency fund. 

Sometimes, to get a car as soon as possible, people also buy pre-loved cars — but if you don’t have enough knowledge, time, or help from an expert to check the car, you may end up paying more than what you’ve bargained for. 

In the Philippines, all commercial banks offer auto-loans. The good thing is that despite loans seemingly being expensive, they really have lower interest rates compared to other types of loans.

Here are two reasons why getting an auto loan in the Philippines is a good idea:

1. Car loans are flexible

No matter how much your lump sum is, you can afford an auto-loan in the country. Most banks offer an auto-loan for as little as 20% down payment.

For a car or SUV that is worth P1,000,000, you only have to shell out P200,000 plus around P20,000 for taxes, documentation and other miscellaneous charges.

It will take you some time to save up for the 20% down payment, but it’s faster than saving up for a higher percentage down payment. And if your car is to be used as an income source, the opportunity cost alone is enough reason to get an auto-loan so you can start making money with your car. 

If you can afford to pay the monthly amortization of the car for five years, then all it takes is roughly two years to save up for your 20% down payment.

The average interest rate for auto-loans is between 4% to 30% — but since we’re under the assumption that you’re buying a car to use it as a source of income, this is much better than getting a personal loan which doesn’t have any goal behind it. 

2. Accessibility of car loans

All commercial banks in the country offer auto-loans. The interest rates may vary so you can go with the best bank that meets your specific needs. 

All banks also offer flexible terms: you can buy a car for 20%, 30%, 40%, or 50% down payment. 

For you to get started with the process, research for the starting price of your target car. Then, to save time and resources, you can also check online to compare car loan offers of different banks. 

Once you’ve decided, you need to dedicate a day when you will contact the bank (either online or in the branch) so you can receive the list of documents required from you. 


If you want to shop for a loan, you can use a tool called UpFinance. It is an online tool that can help you compare loans between financial institutions. With this, it will be easier for you to decide which bank you want to do business with.

Leave a Reply

Your email address will not be published. Required fields are marked *