Acquiring a vehicle, whether it’s a brand-new model from the showroom or a reliable pre-owned gem, is a significant financial commitment. For many in the Philippines, a car loan is the most practical way to turn this aspiration into reality. Asia United Bank (AUB) stands as a prominent financial institution offering competitive auto loan products designed to cater to a wide range of needs. This comprehensive guide will delve into AUB Car Loans, focusing specifically on the special interest rates offered for both new and used vehicles, along with factors influencing these rates, eligibility, and the application process. Understanding these details will empower you to secure the most favorable terms for your automotive financing.
Understanding AUB Car Loans: Key Features
AUB’s auto loan products are tailored to facilitate vehicle ownership, providing various features that make them an attractive option:
- Competitive Interest Rates: AUB aims to offer attractive rates for both brand new and used vehicles, making them a strong contender in the auto loan market.
- Flexible Payment Terms: Loan terms typically range from 12 months to 60 months (5 years), allowing borrowers to choose a repayment period that aligns with their financial capacity. Longer terms result in lower monthly amortizations but higher total interest paid, while shorter terms mean higher monthly payments but less overall interest.
- High Loanable Amount: AUB generally offers a high loan-to-value (LTV) ratio, often financing up to 80% to 90% of the vehicle’s selling price or appraised value, depending on whether it’s new or used. This reduces the upfront cash outlay required from the borrower.
- Fast Approval Process: AUB aims for an efficient and streamlined application and approval process, minimizing waiting times for borrowers.
- Wide Range of Accepted Vehicles: AUB finances a broad spectrum of vehicles, from sedans and SUVs to commercial vans, catering to personal and business needs.
Special Interest Rates for New Vehicles (Brand New Car Loans)
For those eyeing a pristine vehicle fresh from the dealership, AUB offers dedicated interest rates designed to be competitive and enticing. Brand new car loans often come with slightly more favorable terms compared to used car loans, primarily due to the lower perceived risk for the bank (e.g., lower depreciation in the initial years, no prior ownership issues).
Factors Influencing New Car Loan Rates:
- Loan Term: Shorter terms (e.g., 12-36 months) usually have lower interest rates than longer terms (e.g., 48-60 months).
- Down Payment: A higher down payment (e.g., 30% or more) can sometimes lead to a slightly lower interest rate, as it reduces the bank’s exposure.
- Borrower’s Credit Score: Excellent credit history and financial stability are key to securing the best published rates.
- Promotional Offers: Dealership tie-ups or AUB-specific promotions might offer special, limited-time lower rates.
- Market Conditions: Overall economic conditions and the Bangko Sentral ng Pilipinas (BSP) policy rates influence general lending rates.
Indicative AUB Interest Rates for Brand New Vehicles (as of Mid-2025):
- 12-24 Months: Approximately 6.50% – 7.50% p.a. (Add-on Rate)
- 36 Months: Approximately 7.00% – 8.00% p.a. (Add-on Rate)
- 48 Months: Approximately 7.50% – 8.50% p.a. (Add-on Rate)
- 60 Months: Approximately 8.00% – 9.00% p.a. (Add-on Rate)
Note on Add-on Rate: Auto loan interest rates in the Philippines are often quoted as “add-on rates.” This means the interest is calculated based on the original principal amount for the entire loan term, then added to the principal to determine total repayment. This differs from “effective interest rates,” which compound annually on the remaining principal balance. The effective interest rate for an add-on loan will always be higher than the quoted add-on rate. Always clarify the effective interest rate (EIR) if comparing different loan products.
Special Interest Rates for Used Vehicles (Pre-Owned Car Loans)
Financing a used vehicle can be a smart and economical choice, especially for first-time car owners or those with specific budget constraints. AUB also provides competitive rates for pre-owned cars, though these typically run slightly higher than rates for new vehicles due to factors such as:
- Higher Risk of Depreciation: Used cars generally depreciate faster, especially older models, posing a higher risk to the collateral value for the bank.
- Potential for Mechanical Issues: Used cars may have unforeseen maintenance costs, which can impact the borrower’s ability to repay the loan.
- Appraisal Value Volatility: The market value of used cars can be more subjective and volatile.
Factors Influencing Used Car Loan Rates:
Beyond the factors for new cars, specific elements for used vehicles also play a role:
- Vehicle Age: Older vehicles (e.g., 5-7 years old at the time of loan maturity) typically have higher interest rates or shorter maximum loan terms. AUB usually finances vehicles up to 8-10 years old by the end of the loan term.
- Vehicle Condition and Appraisal: The actual appraised value and condition of the used car will affect the loanable amount and potentially the perceived risk.
- Source of Vehicle: Buying from a reputable dealership (used car dealer) versus a private seller might also influence the bank’s assessment.
Indicative AUB Interest Rates for Used Vehicles (as of Mid-2025):
- 12-24 Months: Approximately 7.50% – 8.50% p.a. (Add-on Rate)
- 36 Months: Approximately 8.00% – 9.00% p.a. (Add-on Rate)
- 48 Months: Approximately 8.50% – 9.50% p.a. (Add-on Rate)
- 60 Months: Approximately 9.00% – 10.00% p.a. (Add-on Rate)
Comparison Note: Notice the indicative rates for used cars are generally 1.00% – 1.50% higher than those for brand new vehicles across similar loan terms. This difference reflects the additional risk premium associated with pre-owned assets.
Eligibility Criteria for AUB Car Loans
To qualify for an AUB Car Loan, applicants generally need to meet specific criteria, whether applying as an employed individual, self-employed, or a professional.
General Eligibility Requirements:
- Citizenship: Filipino citizen or Filipino resident.
- Age: 21 years old to 65 years old upon loan maturity.
- Income: Stable source of income with a minimum gross monthly income (e.g., Php 30,000 to Php 50,000, depending on the loan amount).
- Credit History: Good credit standing with no adverse credit records (e.g., no history of loan defaults, bounced checks).
Specific Requirements based on Applicant Type:
- For Employed Individuals:
- Regular employee status for at least 1 year.
- Documents: Certificate of Employment with compensation, latest 3 months’ payslips, latest Income Tax Return (ITR) or BIR Form 2316.
- For Self-Employed Individuals:
- Business must be registered and operating profitably for at least 2 years.
- Documents: Business Registration Papers (DTI/SEC, Mayor’s Permit), Audited Financial Statements (last 2 years), Bank Statements (last 6 months), Latest ITR (last 2 years).
- For Professionals (e.g., Doctors, Lawyers):
- Practicing profession for at least 2 years.
- Documents: PRC ID, Latest ITR (last 2 years), Bank Statements (last 6 months), clinic/office address details.
- For Overseas Filipino Workers (OFWs) / Seafarers:
- Proof of consistent remittances or income.
- Valid employment contract, Seaman’s Book (for seafarers), POEA verified contract.
- May require an Attorney-in-Fact in the Philippines.
AUB Car Loan Application Process: Step-by-Step
The application process for an AUB Car Loan is designed to be straightforward. Here’s a general walkthrough:
Phase 1: Pre-Application and Document Preparation
- Determine Your Budget: Before anything else, assess how much you can comfortably afford for a monthly car loan payment and down payment. Consider not just the car price but also insurance, registration, and maintenance.
- Choose Your Vehicle: Decide whether you’re getting a brand new or used vehicle, and select the specific model. For used cars, get an initial assessment of its value and condition.
- Gather Required Documents: Collect all necessary personal, income, and vehicle-related documents in advance. This is crucial for a smooth process.
- Standard Documents: Duly accomplished AUB Auto Loan Application Form, Photocopy of 2 valid IDs (with photo and signature), Proof of billing (e.g., Meralco bill, water bill), Marriage contract (if applicable).
- Income Documents: (As per applicant type above).
- Vehicle Documents: Proforma Invoice/Quotation from dealership (for new cars), Deed of Sale/OR/CR/Pictures of vehicle (for used cars).
Phase 2: Application Submission and Evaluation
- Submit Application: Submit your complete application form and all supporting documents to an AUB branch or through their online channels if available.
- Initial Interview and Credit Checking: AUB will conduct an initial review of your documents and may interview you to clarify details. A thorough credit check will be performed to assess your creditworthiness. This includes checking your credit score and history with other financial institutions.
- Vehicle Appraisal (for Used Cars): For used vehicles, AUB will arrange for a physical appraisal of the car to determine its fair market value, which impacts the final loanable amount.
- Loan Approval: If your application meets all criteria, AUB will issue a loan approval, detailing the approved loan amount, interest rate, and terms. This step typically takes a few days, depending on the completeness of documents and complexity of the application.
Phase 3: Loan Release and Vehicle Acquisition
- Sign Loan Documents: Once approved, you will sign the Promissory Note, Chattel Mortgage (which registers AUB’s lien on the vehicle), and other necessary loan documents.
- Pay Down Payment: You will need to make your agreed-upon down payment to the dealership or seller.
- Insurance Requirement: AUB will require the vehicle to be comprehensively insured, with the bank as the loss payee. You can typically choose your preferred insurance provider, as long as it’s accredited by AUB.
- Loan Release: Upon completion of all requirements (signed documents, down payment proof, insurance coverage), AUB will release the loan proceeds directly to the car dealership or seller.
- Vehicle Release: The dealership will then release the vehicle to you.
Tips for Securing the Best AUB Car Loan Rates and Smooth Process
- Maintain a Strong Credit Score: Consistently pay your debts on time. A clean credit record is your biggest asset for securing lower rates.
- Save for a Larger Down Payment: Paying more upfront reduces your loan amount and can sometimes qualify you for a slightly better interest rate.
- Compare Rates: While this guide provides indicative rates, always get a personalized quotation from AUB and compare it with at least two to three other banks before committing.
- Clarify All Fees: Beyond the interest rate, ask about all associated fees: processing fees, chattel mortgage registration fees, notarial fees, and insurance premiums. These can add to the total cost.
- Consider a Shorter Loan Term (If Affordable): If your budget allows, opting for a shorter loan term will significantly reduce the total interest paid over the life of the loan.
- Be Truthful in Your Application: Provide accurate and complete information. Any discrepancies can cause delays or even rejection.
- Inquire About Promos: Ask AUB directly about any current auto loan promotions or tie-ups with specific car brands or dealerships.
Conclusion
An AUB Car Loan can be your reliable partner in acquiring your desired vehicle, whether new or used. By understanding the distinct interest rates for each category, familiarizing yourself with the eligibility criteria, and preparing diligently for the application process, you are well-equipped to navigate the journey towards car ownership. Always conduct thorough research and compare options to ensure you secure the most advantageous terms. With careful planning and AUB’s offerings, your automotive aspirations are well within reach.
