In short
EastWest charges 6% per month, and RCBC charges 3% per instance plus 5% monthly penalty interest. Each rate applies to the unpaid installment, not your full loan balance, and a fraction of a month usually counts as a whole month.
On a ₱20,000 monthly installment 10 days late at Metrobank's rate, that is about ₱1,000 in penalty for the period.
Fall further behind and a bank that refers your account to an attorney or collection agency can add fees worth 20% to 25% more. Nothing caps these figures; BSP places no regulatory ceiling on car loan interest, fees or penalties.
What the law does give you is a 30-day maximum cure period before an account counts as officially past due. It also gives a court the power to reduce a penalty that is unconscionable.
- Highest stated monthly penalty rate
- 6% per month (EastWest, on the unpaid installment)
- Lowest stated monthly penalty rate
- 3% per instance of delay (RCBC late fee, on top of separate 5% penalty interest)
- Banks with a stated exact penalty rate
- 5 of 9 compared: Metrobank, UnionBank, EastWest, Maybank, RCBC
- BSP maximum cure period
- 30 days, product-specific, at the bank's discretion
- Regulatory ceiling on car loan penalties
- None; BSP does not cap interest, fees or penalties on car loans
- Court power over an excessive penalty
- Civil Code Art. 1229: a judge may equitably reduce a penalty that is iniquitous or unconscionable
- Documentary stamp tax on a car loan
- ₱1.50 per ₱200 of the loan amount, a government tax, not a lender penalty
- Add-on rate disclosure status
- BSP FAQ calls add-on and straight-line interest computation "prohibited" as a disclosure method
- Banks that still quote add-on rate tables anyway
- BPI, Metrobank and RCBC all state add-on rates for car loans
How much is the penalty for a late car loan payment?
Five Philippine banks state an exact late payment penalty rate on their own sites. The rest either say penalties apply without naming a figure, or say nothing at all.
BPI, BDO, PNB and Chinabank all mention late payment charges on their fee pages. But none state a percentage or peso amount for a car loan specifically.
If your lender is one of these four, ask for the exact rate in writing before you sign. Do not assume it matches a competitor's stated figure.
| Bank | Penalty Rate | How It's Charged |
|---|---|---|
| Metrobank | 5% per month | On the unpaid monthly installment; fee table updated 25 May 2026 |
| UnionBank | 5% per month | On the unpaid gross monthly installment; a fraction of a month counts as a full month |
| EastWest | 6% per month | On the unpaid gross monthly installment or advances; a fraction of a month counts as a full month |
| Maybank | 5% per month | On any unpaid monthly installment or fraction of one; can trigger acceleration of the full balance |
| RCBC | 3% per instance, plus 5% per month penalty interest | 3% charged once per late payment; 5% penalty interest charged monthly on the overdue amount (promissory note template) |
How is the penalty actually computed?
Every stated rate here applies to the unpaid installment for that period, not your remaining loan balance. Say your monthly amortization is ₱20,000 and you are 10 days late at a bank charging 5% per month.
This example uses Metrobank's stated rate. You owe roughly ₱1,000 in penalty for that installment, and the charge does not shrink because you were only 10 days late.
UnionBank, EastWest and Maybank all state the same rule in their own contracts: a fraction of a month counts as a whole month.
Before a missed payment reaches that stage, BSP gives banks room to offer a cure period. A bank may allow up to 30 days to catch up before the account is treated as past due.
But this is a product-specific choice each bank makes, not a right you can demand. Once any installment misses its due date, BSP rules treat your entire outstanding balance as past due, not just the missed installment.
Most bank contracts also let the lender accelerate the loan. That means the whole remaining balance becomes due at once, after a set number of missed payments.
UnionBank's terms name three consecutive missed amortizations as the trigger. If your account reaches that point, see our car loan repossession guide for what a lender can and cannot do next.
The rate banks advertise isn't the rate you pay: add-on vs effective
This is the one fact almost no car loan page in the Philippines states plainly. BSP's own FAQ on the Truth in Lending Act says add-on and straight-line interest computation are not allowed.
Neither counts as a way to disclose a loan's true cost. Yet BPI, Metrobank and RCBC all state add-on rate tables for their car loans anyway, sitting right alongside a separate effective rate column.
Take Metrobank's own stated table. A 60-month brand-new car loan shows an add-on rate of 30.26% against an effective rate of 10.93% per annum, In Arrears terms.
That figure is as of its 5 June 2026 update. BPI's 60-month brand-new figures show an even wider gap: 31.01% add-on against 11.19% effective.
The add-on number looks alarming and the effective number looks tame, and neither bank explains the gap on the page where it states both.
This is not an accusation that any bank is breaking a rule. BSP has not stated a statement resolving why add-on tables still appear on car loan pages next to the prohibition.
What it means for you is practical: ask your lender for the Effective Interest Rate (EIR), not the add-on rate, before you compare offers. Under BSP's own formula, Annual EIR = (1 + i)^n - 1.
Here, i is the periodic rate and n is the number of periods in a year. It is the EIR that reflects what the loan actually costs you.
If a lender only quotes you an add-on rate, ask directly for the EIR before you sign. BSP's own loan calculator exists for this comparison, and the bank is expected to give you the actual figure at application.
What happens if you fall further behind: collection and attorney's fees
Once a bank refers your account to a collection agency or attorney, the fees stack on top of the monthly penalty. Three lenders state these figures directly in their loan or promissory note terms.
- UnionBank, referred account
- Attorney's fees 25% of the total sum due (minimum ₱50,000), plus liquidated damages of another 25% (minimum ₱50,000)
- Maybank, referred account
- Collection fee 25% of the total sum due (minimum ₱10,000); attorney's fees 25% of outstanding principal (minimum ₱30,000); liquidated damages 20% of outstanding principal
- RCBC, referred account (promissory note template)
- Collection fee ₱5,000 or actual expense, whichever is higher; attorney's fees ₱10,000 or 25% of the total sum due, whichever is higher; liquidated damages 25% of outstanding obligations
- Security Bank, combined rate
- 6% of unpaid amortization, combining its collection fee and late payment fee into one charge, effective 25 October 2021
Can a car loan penalty be reduced if it's excessive?
BSP places no ceiling on car loan penalties, but the Civil Code gives courts a separate check. Under Article 1226, a penalty clause normally substitutes for actual damages and interest once you default.
So the lender does not need to prove its actual loss to collect the penalty. Article 1229 then limits how far that can go.
A judge shall equitably reduce a penalty if you partly complied, or if the penalty itself is iniquitous or unconscionable.
This protection only works through a court case, not automatically at the bank's counter. A penalty and its stacked collection fees can push far past what a reasonable lender would need to cover its actual loss.
When that happens, it is the legal ground for challenging it. It is worth raising with a lawyer before you pay a disputed amount in full.
Is there a penalty for paying off your car loan early?
This guide covers what each lender charges to close a loan early. For the full mechanics of ending a loan before its term, see our car loan early termination guide.
No bank states a pre-termination fee as a percentage of your outstanding balance.
| Lender | Pre-termination fee |
|---|---|
| Chinabank AutoPlus | None; the bank states you may pre-terminate free of charge |
| Metrobank | ₱7,500 flat pre-payment processing fee, listed in a consumer loan fee table not split by product |
| EastWest | A processing fee "in an amount the bank determines"; no figure stated |
| RCBC (promissory note template) | Service fee at the Disclosure Statement rate times the principal prepaid, for full prepayment only; partial prepayments carry no such fee |
| UnionBank | No separate fee stated; you pay the outstanding balance plus interest computed on an annuity basis |
| BPI, Dream More Deals promo loans only | Pre-termination and advance payment are not allowed within the first 3 years of the promo loan |
Before you sign: a penalty-protection checklist
Use our car loan calculator to see how a monthly installment compares across lenders, then confirm these points before you commit to one.
7 of 7 still to check
What about motorcycle loans, like Motortrade?
Motortrade finances its motorcycle loans through partners including Bank of Makati, Fundline and Northpoint, not through Motortrade itself.
Neither Motortrade's own FAQ page nor Bank of Makati's motorcycle loan page states a late payment penalty rate, so we cannot state one here.
Every BSP-supervised lender is required to give you a signed Disclosure Statement before you sign. That form has a specific line for conditional charges, including any late charge or prepayment penalty.
If your motorcycle or car lender has not shown you that line filled in, ask for it directly rather than accepting a verbal figure.