• Car Loan Refinancing in Philippines

    Life is filled with commitments that more or less have a financial face to it. More often than not, we end up getting a loan to fulfill the requirement since it provides a lump sum amount and lets us pay back in Equated Monthly Installments(EMI). Refinancing is one loan product that is fast evolving as a most sought after loan due to multiple benefits and features such as a high loan amount and pleasing interest rates. In this sector, one of the most visible option is Car Refinance(Auto Refinancing), where one can pledge car as collateral and avail a loan amount from the bank or the financial institution.

    What is Car Loan Refinancing?

    Not as sophisticated as the name sounds, this option works like any other loan instrument where you get an approved loan amount that should be paid back in equated installments along with applicable interest charges over a predefined term. Since this is a secured loan, the vehicle can be provided as collateral to the bank. Depending on the bank and offers, one can finance up to 70-80% of the appraised value of the car to influence the loan amount. The borrower can use the loan for both personal and business purposes.

    Many leading banks in the country offer car refinance as a part of their retail lending portfolio. In the next section, let's look at some of the advantages of refinancing your car in Philippines.

    Advantages of Car Loan Refinance

    It's easy and Quick

    Since the borrower is pledging the vehicle as collateral, it's relatively easy to avail with minimal documentation. Not many checks and balances are involved since the borrower is offering the vehicle as security.

    Flexible repayment terms

    Since this is EMI based loan, the borrower is free to choose repayment tenor as per repayment convenience. Payback in installments of your choice along with applicable interest charges.

    High Loan Amount

    You’re likely to get a loan amount of your choice when compared to other products in the market of similar nature. The approval is based on the market value of your vehicle along with a few background checks such as scrutiny of the credit history and income.

    Competitive Interest Rates

    The interest rates are quite affordable and is similar to other products in its category such as Personal and Car Loans. The rate of interest is varies on the basis loan amount, tenor along with other factors such as promotional offers.


    The conditions provided below is a representation of the most commonly observed eligibility criteria across various banks and financial institutions. Contact the bank for detailed information on the criteria.

    • Age of the applicant should be at least 21 years with an upper cap of 60-65 years.
    • The applicant should be a Filipino citizen/Foreigners with ACR(Alien Certificate of Registration).
    • Should be living in the current place of residence for a min. number of years.
    • Should fulfill the min. income criteria. This clause holds good for both salaried and self employed applicants.
    • Should have valid documents pertaining to the vehicle being pledged as collateral.

    Some of the banks also accept Car Refinancing applications from companies and corporations. If you’ve a requirement such as bulk refinance, try to negotiate a deal with the bank. Some of them maintain exclusive schemes for corporate level requirements.

    Application Requirements

    The documentation is dependent on the bank you’re applying with. Some of the most common ones have been listed below for reference.

    • Duly filled and signed application form in the required format.
    • One or more ID proof with photo. This also applies to co-applicants & co-borrowers.
    • Latest ITR(Income Tax Returns).
    • Bank statements of last three months or more.
    • Copy of LTO Registration Certificate.
    • Firms or Corporates should provide paperwork relating to the business such as SEC Registration, Articles of Incorporation, DTI Registration etc.

    When Do I Consider Car Loan Refinancing as an Option?

    Car Refinancing can be your standard loan for a multitude of requirements. One can look forward to this option for a range of needs such as consolidation of existing debts, paying off credit cards, business expansion etc.

    It can be an alternative to standard loans such as a Personal Loan if you’re getting a good deal in terms of the loan amount, rates and fees. Refinancing the car also helps in cases where the credit rating of the applicant is not up to the expectation. Providing the car as collateral not only helps in securing a loan amount of your choice but also helps in building credit for the future.

    Car Refinancing also helps if the need for a loan is urgent since the general TAT(Turn Around Time) for processing the application is just around 2-3 business days.

    Top Banks Offering Car Loan Refinancing in Philippines

    • Security Bank
    • Maybank
    • RCBC Savings Bank

    Tips To Help You In Getting the Best Car Loan Refinance Deal

    Refinancing your car is one the easiest ways to get a loan since the collateral secures the loan amount upfront, reducing the risk factors for the bank. Here are some tips to help you in getting the best deal.

    • It's paramount to keep documents relating to the car in place. Registration papers, Loan N.O.C certificates(if the car was originally procured on loan) should be valid and up to date.
    • The vehicle should be in good condition since the bank will inspect the unit to ascertain the condition and also to determine the loan amount based on the market value of the car.
    • Comparing online before applying helps immensely in understanding the product on the offer, rates and fees. This equips you with sound knowledge to negotiate the terms further.
    • Just before you apply, understand the requirements and arrange for them on the sidelines of application so that it becomes easy to handover the paperwork as and when required. This act helps in reducing the turnaround time.
    • After availing the loan, read the contract focusing specifically on the terms and conditions so that there are no hiccups at a later date in terms of disagreement of certain points with the bank.
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