A Guide to Your First Car Loan

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It’s everyone’s dream to own a car. But with the prices of modern cars today, it’s kind of difficult to think of owning one especially with the prices that tend to skyrocket. Moreover, the price of gas and oil are increasing as well. There are institutions, however, that gives aid to people who yearn to own a car.

We will be dividing this guide into different sections:


Getting a car loan is probably one of the many things that cross every person’s mind. Imagine, a regular sedan nowadays costs half a million pesos already. Even if you have that amount, you wouldn’t spend all of those in just a single purchase. This is why banks and other financial institutions offer car loans to those people who want to own a car.

Where can you get a car loan?

As mentioned above, you can get car loans from banks, from dealerships, and other institutions who make a living by providing loans. Even though that’s the case, you need to weigh out and check where you can have a better deal in.

Through banks VS. through other financial institutions

It’s easy to be approved if you apply for a car loan through other financial institutions. However, the interest rates would be much higher than that of as a bank. Since you won’t go through a ton of hassle through these financial institutions, they take the hassle out of the payment of the interest.

Getting a car loan through a bank can give you lower interest rates for up to four (4) or five (5) percent. If you’re getting a car loan for the first time, it is ideal to get a car loan that has little interest so you have time to adjust for future loans. This sort of practices you in paying for loans.

Asking aid from banks, however, might be a bit of a hassle as it will require more patience and work. They’ll ask for many different requirements that you need to cope with before they actually approve your car loan application.

How do you apply for a car loan through a bank?

Before actually applying for a car loan, first, check if you’re qualified for one. There are certain requirements before you can apply for a car loan through a bank:

Eligibility and requirements


  • Monthly income (household): Php30, 000 to Php50, 000 **this would depend on the bank. There are banks which require smaller monthly household incomes and there are banks who require larger amounts.
  • Age: Should be 21 years old or above. The person who will loan should not be 65 years old when the loan matures.
  • Citizenship: Should be a Filipino citizen living in the Philippines and/or living abroad (OFWs)
  • Foreigners could also apply for an auto bank loan. However, they should have a qualified Filipino co-borrower.

Pre-loan qualifications

Another thing you need to consider in terms of applying for a car loan is your pre-loan qualifications. Different banks have different pre-qualification requirements. If you’re interested in knowing what these are, refer to the following guides:

In addition to that, these websites also have loan calculators. You can refer to the guides on how you can use the calculators in order for you to determine the amount you can loan from these banks.

There are many different factors on how much your loaning amount will be. If you utilize the loan calculator, you will see that those are the things or the categories you’ll be toggling but to give you a brief intro on what those are and the following are:

The down payment for the car

Usually, banks would charge up to 50% of the vehicle’s selling price. Of course, the amount of the down payment would greatly affect the amount of your monthly amortization.


Based on what vehicle you’re getting, that’s where all of the factors are going to revolve. So, before getting a loan, double-check how much your capability is in getting that loan

Loan length

Here in our country, we have repayment terms that range from one (1) to six (6) years. A short-term, of course, raises the monthly amortization. A longer one would allow you to pay less but the interest would be higher.

That’s somehow the overview on how you can get your car loan. Hopefully, by this guide, you were able to gauge whether or not applying for a car loan is for you. Do you think that applying for a car loan would be an inconvenience? Have you ever dreamt of owning your own car? With car loans, that dream can become a reality.

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