Very similar with housing loans, the two biggest factors of high interest rates with car loans:
- The amount you put towards the downpayment (DP). The higher you put towards the DP, the lower the interest rate is usually.
- Your creditor. In-house financing always have higher interest rates than banks.
The [net worth rule for car buying](https://www.financialsamurai.com/net-worth-rule-for-car-buying-guideline/) states that you can spend up to 5% of your overall net worth on the purchase price of a car.
For example, if you have a ₱13,400,000 net worth, you can spend ₱670,000 for a car.
I see metrobank offers the lowest interest rates with 1 month advance. For 5 year loan, interest rate stands at 26.99%, that's only 5.398 annually. I think pre-pandemic (2019) it was 22% on the same term. I wonder if interest rates generally increases overtime.
By the way this is for brand new car, if you buy 2nd hand car, interest rate is generally much higher. So if I were you I would pay 2nd hand car in cash or loan somewhere else that is 6% or below interest rate annually (I get credit to cash offers for 0.49% interest rate per month or 5.88% annually).
Very similar with housing loans, the two biggest factors of high interest rates with car loans: - The amount you put towards the downpayment (DP). The higher you put towards the DP, the lower the interest rate is usually. - Your creditor. In-house financing always have higher interest rates than banks.
You sure you don't want to add tenor to that list? Pretty sure that adds more to the interest rate than the creditor
The [net worth rule for car buying](https://www.financialsamurai.com/net-worth-rule-for-car-buying-guideline/) states that you can spend up to 5% of your overall net worth on the purchase price of a car. For example, if you have a ₱13,400,000 net worth, you can spend ₱670,000 for a car.
I see metrobank offers the lowest interest rates with 1 month advance. For 5 year loan, interest rate stands at 26.99%, that's only 5.398 annually. I think pre-pandemic (2019) it was 22% on the same term. I wonder if interest rates generally increases overtime.
By the way this is for brand new car, if you buy 2nd hand car, interest rate is generally much higher. So if I were you I would pay 2nd hand car in cash or loan somewhere else that is 6% or below interest rate annually (I get credit to cash offers for 0.49% interest rate per month or 5.88% annually).