Personal Finance Apprentice

Review of Philipine Banks’ Customer Service and Car Loan Rates Part 3

A structured review of 9 banks in the Philippines. We will go over the adequacy of their customer service as well as check who has the lowest interest rates on car loans. Part 3 of a 3-part series.

Review of Philipine Banks’ Customer Service and Car Loan Rates Part 3

This is part 3 of a 3-part series. If you haven’t read part 1 and part 2 yet, I recommend that you do so.

In the previous articles, we evaluated 9 different banks’ customer service. In this article we’ll go over who has the the lowest interest rates on car loans.

But most banks don’t give out rates outright, instead asking you what terms you want or – annoyingly – asking you to go through the approval process before disclosing any information. Probably, this is so you can’t compare the rates outright, and so they can have a chance to lure you in with promos (like free car insurance).

So to compare them we’ll define a specific loan term and we’ll see who comes out with the most affordable offer. In this case we will use:

  • Brand new vehicle
  • Worth Php703,000
  • 20% down-payment
  • 5-year (60 months) loan term

Now to see which bank can give us the best offer.

(Arranged in chronological order of when I visited them)

*OMA (One Month Advance) – you pay the first month along with the downpayment; cheaper that AOR, but higher initial cash out.
**AOR (In Arrears) – you don’t pay in advance; higher monthly payment but lower initial cash out.
***Everyone mentioned that rates might be haggled down if the bank gets approval to do so. We won’t take that into account since (1) everyone said it, (2) it might not happen, (3) there’s no way to compare who will let you haggle the most.
****Interest Rate = interest paid over the course of 5 years (20% means you paid Php 20,000 over 5 years on a Php 100,000 loan)

Interest Rate (If OMA):    29.13%
Interest Rate (If AOR):    30.26%
Chattel Mortgage: (not given)
Monthly Payment (OMA):  12,104.00
Special ofer mentioned: None

East West Bank
Interest Rate (If OMA):    30.75%
Interest Rate (If AOR):   32.00%
Chattel Mortgage: 19,100
Monthly Payment (OMA):  12,256.00
Monthly payment (AOR):  12,373.00
Special offer mentioned: None

Interest Rate (If OMA):   (not given)
Interest Rate (If AOR):  25.0749
Chattel Mortgage: 12,764.00
Monthly Payment (OMA): (not given)
Monthly payment (AOR):  11,723.69

Special offer mentioned: Lower interest rates until June 30, 2013

Interest Rate (If OMA):   29.84%
Interest Rate (If AOR):  31.04%
Chattel Mortgage: (not given)
Monthly Payment (OMA): (not given)
Monthly payment (AOR):  (not given)
Special offer mentioned: None
*based on the interest rate, the monthly will be lower than East West but higher than BDO and MetroBank

BPI Family
Interest Rate (If OMA):   28.41% (?)
Interest Rate (If AOR):   (not given)
Chattel Mortgage: (not given)
Monthly Payment (OMA): 12,138.46
Monthly payment (AOR):  (not given)
Special offer mentioned: Free 1-year car insurance when the loan is for at least 5 years.
*The rate and the monthly payment given to me do not match; I don’t know why either. That’s the problem with not giving bank representatives the info and tools necessary to answer customer queries. 

PS Bank
Interest Rate (If OMA): 36.10%  
Interest Rate (If AOR):  (not given)
Chattel Mortgage: 13,101.00
Monthly Payment (OMA): (13,140.00) 12,758.00
Monthly payment (AOR):  (not given)
Special offer mentioned: Rebatable collection fee of Php383.00 on the monthly amortization.
*The quote didn’t mention if the payment was OMA or AOR. I’m using OMA since banks usually give that because it has a lower monthly payment.

Security Bank
No information was given.

Interest Rate (If OMA):   31.76%
Interest Rate (If AOR):  (not given)
Chattel Mortgage: 14,500
Monthly Payment (OMA): 12,351.00
Monthly payment (AOR):  (not given)
Special offer mentioned: Minimum is actually 30% down (higher than most banks) though the bank rep said it might be lowered to 20% “if approved.”

China Bank Savings
Interest Rate (If OMA):   26.99%
Interest Rate (If AOR):    28.02%
Chattel Mortgage: 12,913
Monthly Payment (OMA): 11,903.20
Monthly payment (AOR): 11,999.74
Special offer mentioned: None

(For more details and tips on the car loan process, read my other post: Car Loans – What You Need To know)


MetroBank wins! MetroBank has the most affordable car loan rates among the different banks. But this is because of their special (i.e. very low) promo rates.

China Bank Savings would have had the most affordable rate, if not for that special promo rate. This matches my earlier assumption. China Bank gives the highest interest rates on Time Deposits. It makes sense that they would have the lowest car loan rates and that their subsidiary – China Bank Savings – would have even lower rates than them.

PS Bank charges the highest interest rate on car loans – which was very surprising. I’ve heard that they were aggressive in loans, which made me think they gave low rates. The fact that they are a MetroBank subsidiary also gave me the impression they would have at least competitive rates (i.e. lower than MetroBank’s regular rates). But that doesn’t seem to be the case.

BPI and Security Bank didn’t get a chance to really compete because their process for handling of loan inquiries is – in my personal opinion -bad.

I really wanted for East West to have the most affordable rates. Sadly it wasn’t even close.

Union Bank would have charged a monthly payment of 13,514.00 – I got the info online, from their official website. I passed by their branch but didn’t come in to inquire because they were significantly more expensive than the competition.

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