Auto / Car Loan Calculator Philippines 2026
Estimate your monthly amortization, total interest, and out-of-pocket cost for a car loan in the Philippines. Supports both add-on and diminishing balance methods used by BDO, BPI, Security Bank, Metrobank, and other PH banks.
Compare terms (same vehicle, same rate)
| Term | Monthly | Total interest | Total paid |
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How car loans work in the Philippines
A car loan (or auto loan) lets you buy a vehicle now and pay for it in monthly installments over a set term. In the Philippines, banks and dealer financing arms quote car loans almost always using the add-on rate method, even though the actual cost is closer to a diminishing-balance rate that’s roughly double the quoted figure. Understanding how the math works will help you compare offers honestly.
Add-on rate (the PH default)
Under the add-on method, the bank calculates interest one time on the full loan amount, then spreads the principal plus that interest evenly over the term.
- Total interest = Loan amount × add-on rate × number of years
- Monthly payment = (Loan amount + Total interest) ÷ number of months
Example: borrow ₱960,000 at 8.99% add-on for 5 years. Total interest = 960,000 × 0.0899 × 5 = ₱431,520. Monthly = (960,000 + 431,520) ÷ 60 = ₱23,192.
Diminishing balance (true effective rate)
This is the method used for housing loans, personal loans from digital banks, and most international auto loans. Interest is recalculated each month against the remaining balance, so as you pay down the loan, the interest portion shrinks. The true effective annual rate on a PH add-on car loan is typically 1.7× to 1.9× the quoted add-on rate.
What rates can you expect in 2026?
Indicative new-car loan rates from major Philippine banks (advertised add-on rates, before dealer subsidies or promo discounts):
Rates vary by loan term (shorter terms get lower rates), vehicle type (brand-new vs second-hand), down payment percentage, and your credit profile. Dealer-tied promos sometimes offer rates as low as 4.99% for 12 months on specific models.
Down payment in the Philippines
Banks typically require a minimum 20% down payment on brand-new vehicles. Used cars often require 30% or higher because they depreciate faster and the bank’s collateral is weaker. Here’s how down payment affects your monthly:
- 20% DP — minimum for most banks; highest monthly
- 30% DP — common dealer promo tier; modest monthly drop, often paired with discounted rate
- 50% DP — common for cash buyers who want a small loan for tax benefits; lowest monthly
Fees you’ll pay on top of the loan
The amortization above is just the bank’s portion. Total Day-1 out-of-pocket cost on a typical ₱1.2M brand-new car usually includes:
- Chattel Mortgage Fee — registration of the vehicle as collateral, roughly 1% – 1.5% of the loan or a flat ₱8,000 – ₱15,000
- Notarial fee — ₱2,000 – ₱5,000
- LTO Registration & Plates — ₱15,000 – ₱20,000 first year for a private car
- Comprehensive insurance (Year 1) — banks require this for the entire loan term; ₱25,000 – ₱45,000 per year for a ₱1.2M car
- TPL (Third Party Liability) — bundled into LTO registration, ~₱600
- Dealer documentation / handling — ₱5,000 – ₱15,000 depending on dealer
All-in, expect ₱50,000 – ₱80,000 in fees on top of the down payment for a new vehicle in the ₱1M – ₱1.5M range.
Tips before you sign
- Get the all-in cash-out quote in writing. Make the dealer list chattel mortgage fee, insurance, LTO, doc stamps, and any “add-ons” separately.
- Compare add-on rates from at least 3 banks. Most dealers work with multiple banks; ask which gives the lowest rate for your chosen term.
- Watch out for “free” insurance. Free first-year comprehensive insurance is sometimes built into a higher rate or a higher cash price. Compute the all-in cost.
- Pre-termination penalties. Most PH car loans have a 5% – 8% pre-termination fee if you pay off early. If you plan to settle early, ask for the exact formula.
- Don’t forget yearly running costs. Comprehensive insurance for years 2 onward, LTO renewal, maintenance (PMS at 5,000 / 10,000 / 20,000 km), and fuel will add ₱70,000 – ₱150,000 per year on top of the amortization.
Frequently asked questions
What’s the minimum down payment for a car loan in the Philippines?
Most Philippine banks require a minimum 20% down payment on brand-new vehicles and 30% on second-hand units. Some dealer-tied promos offer “low down payment” deals at 15% or even ₱0 down, but these usually pair with higher interest rates or shorter promotional terms.
What’s the difference between add-on and diminishing rate?
Add-on rate computes interest once on the full principal — your monthly payment is the same every month and you pay the same total interest whether you pay early or not. Diminishing balance recalculates interest each month on the unpaid balance, so total interest is lower for the same nominal rate. PH banks quote add-on; international and digital lenders quote diminishing. An 8.99% add-on rate for 5 years is roughly equivalent to a 16% – 17% diminishing rate.
How long can I stretch a car loan in the Philippines?
The most common terms are 12, 24, 36, 48, and 60 months. Some banks (BDO, BPI, Security Bank) offer up to 72 months for brand-new cars. Used car loans typically cap at 48 months because of depreciation. Longer terms lower your monthly payment but increase the total interest you pay over the life of the loan.
Can I pay off my car loan early?
Yes, but expect a pre-termination penalty of 5% – 8% on the outstanding balance. Under the add-on method, you’ve already been charged the full interest upfront, so paying early doesn’t always save money unless the bank waives the unused interest (rare). Ask for the specific pre-termination formula in writing before signing.
Do I need comprehensive insurance for a financed car?
Yes. Every PH bank requires comprehensive insurance for the entire loan term as a condition of approval. The car is the bank’s collateral, and they need it protected against theft, collision, and acts of nature. Plan for ₱25,000 – ₱45,000 per year on a ₱1.2M car, depending on coverage and provider.
What’s a chattel mortgage fee?
A chattel mortgage is the legal document that registers your vehicle as the bank’s collateral until the loan is fully paid. The fee covers registration with the LTO and the Registry of Deeds. It’s usually 1% – 1.5% of the loan amount, or a flat ₱8,000 – ₱15,000. Once you pay off the loan, you’ll need to file a Cancellation of Chattel Mortgage to clear the title.
How is this calculator different from the bank’s calculator?
This calculator gives you the same amortization figure most PH banks show using the add-on method. The exact monthly may differ by ₱50 – ₱200 because each bank rounds differently, applies a small documentary stamp tax, or builds in a service fee. Use this as a quick budgeting tool, then ask your chosen bank for the official Loan Disclosure Statement.