Financial Blog

Owning a car in the Philippines has become increasingly essential due to challenges in public transportation, unpredictable weather, and the desire for personal convenience. However, as demand grows, car prices have surged. Securing an Auto loan can be an effective solution to make car ownership more accessible. This guide provides an overview of auto loans in the Philippines to help you navigate the process.

What is an Auto Loan?

An auto loan is a type of financing where a bank or financial institution lends you money to purchase a vehicle. Instead of paying the full price upfront, you repay the loan through monthly installments over a specified period, typically ranging from 12 to 60 months. This arrangement allows you to manage your finances more effectively while enjoying the benefits of car ownership.

Types of Auto Loans

Secured – A secured car loan requires a collateral, which maybe the car itself. If you fail to pay, the bank can repossess the vehicle.

Unsecured – An unsecured loan doesn’t  require collateral and relies mostly on your credit score and financial history.

Key Terms to Remember

1. Loan Amount & Down Payment – Most banks require a 20%–30% down payment, and the remaining balance is financed through the loan.
2. Interest Rate – Rates range from 4% to 7% per year in the Philippines, depending on the lender, loan term, and your credit score.
3. Loan Term – You can choose a repayment period from 1 to 5 years. Longer terms mean lower monthly payments but may result in higher total interest.
4. Monthly Payments – Your monthly amortization Your monthly amortization covers both loan principal and interest, do your research to make sure it fits your budget to avoid financial strain.

Auto Loan Process in the Philippines:

1. Check Your Eligibility
2. Prepare Required Documents
3. Submit Your Application
4. Get Loan Approval & Pay the Down Payment
5. Receive Your Car & Start Monthly Payments

Auto Loans can make owning a car easier and more convenient. Choose which terms and type best fits you and your budge that will allow you to drive comfortably and less hassle overtime. 

Get behind the wheel with Security Bank’s Auto Loan. Apply now and start your journey! Click here to apply!