Car Key on hand

Acquiring a new car signifies a significant milestone. It represents not only freedom and convenience but also the potential for exciting adventures. However, before celebrating your purchase, it’s important to carefully navigate the financial aspects involved. This guide aims to simplify the car loan process, providing you with the essential requirements and tips to ensure a smooth ride toward buying your dream car in the Philippines.

Understanding Car Financing

Car financing, also known as auto loan or vehicle financing, allows you to spread the cost of your car over a set period, typically through monthly payments. This makes owning a car more accessible, but it’s important to understand the commitment involved.

Key Considerations Before Applying for a Car Loan

Interest rates are essentially the cost of borrowing money. Opting for a loan with a lower interest rate can lead to more affordable monthly payments, reducing the overall financial burden of your new car.

The loan term determines the duration over which you’ll repay the loan. Choosing a shorter loan term generally results in higher monthly payments, but it also means you’ll pay less interest over the life of the loan, saving money in the long run.

Making a substantial down payment reduces the total amount you need to borrow. This upfront payment not only lowers your monthly loan payments but can also improve your loan terms, making financing more manageable and cost-effective.

Car Loan Requirements in the Philippines

Meeting the car loan requirements is your next step. While these can vary by lender, the following are generally necessary:

Person Writing on a Clipboard Inside the Vehicle


Meeting the car loan requirements is your next step. While these can vary by lender, the following are generally necessary:

  • Age – Typically, you must be at least 21 years old and not older than 65 when the loan matures.
  • Citizenship – Filipino citizens residing in the Philippines or abroad (including OFWs) are eligible. Foreign residents may need a qualified Filipino co-borrower.
  • Income – Banks typically require a minimum monthly salary or household income (around Php 40,000 and up).
  • Employment Status – Two years of stable employment or business operation is generally preferred.


  • Valid government-issued IDs (passport, driver’s license, SSS ID, etc.).
  • Proof of income – Payslips, certificate of employment (COE), or Income Tax Return (ITR) for employed individuals.
  • Business registration, permits, bank statements, and financial statements for self-employed applicants.
  • Overseas Filipino Workers (OFWs) may need proof of remittance, payslips, or COE.
  • Proof of residency (e.g., utility bills).

Alternative Options: Sangla ORCR

While car loans are a popular option, Sangla ORCR (using your car’s Official Receipt and Certificate of Registration as a collateral) is another route to consider. This involves borrowing money from a financing company using your car’s ORCR as collateral. However, interest rates for Sangla ORCR tend to be higher than car loans.

Getting Car Loan Approval

  • Look around – Compare interest rates, loan terms, and fees offered by different banks and financing companies.
  • Maintain a good credit score – A healthy credit score can significantly increase your chances of loan approval and secure better interest rates.
  • Prepare strong documentation – Ensure all your documents are complete and accurate to avoid delays in processing.

Leverage Your Car Purchase Wisely

Understanding car loan requirements is the first step to securing a car loan that fits your budget and financial goals. By carefully considering your options and preparing all the necessary documents, you can cruise towards owning your dream car with confidence.

Looking for the Best Car Financing Service in the Philippines?

Connect with SAFC – one of the leaders in the financing industry in the Philippines. We pride ourselves on delivering tailored financing options designed to fit your specific needs, ensuring a smooth and straightforward car purchasing process. Our team of experts is dedicated to ensuring that your car financing experience is seamless and beneficial. Contact us today to learn more about how we can help you finance the car of your dreams with ease and confidence. #KayaMoNa

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