Chattel Mortgage Guide Philippines 2026

In short

But since 3 February 2025, the security interest is registered as a notice in the government's Personal Property Security Registry (PPSR). It is no longer filed in the old paper-based Chattel Mortgage Registry.

Chattel mortgage and encumbrance fee lines appear separately across 8 banks, and none states one total cash-out figure for the whole process. The PPSR notice itself costs ₱380, the same flat fee no matter which bank holds your loan.

This guide lays out the fee lines banks state and how the PPSR notice is registered and cancelled. It also covers what happens once your loan is paid off.

Old law

Act No. 1508, "The Chattel Mortgage Law" (1906)

Current law

RA 11057, Personal Property Security Act (PPSA), signed 17 August 2018

Registry operator

Land Registration Authority (LRA)

Registry name

Personal Property Security Registry (PPSR), an online notice registry

PPSR go-live date

3 February 2025

Old Chattel Mortgage Registry (CMR)

Stopped accepting new vehicle transactions from PPSR go-live; eCMR ran for pending cases until 29 August 2025

PPSR new notice fee

₱380

PPSR termination notice fee

No fee

Who usually files the termination notice

The bank (secured party), on full payment

LTO encumbrance annotation

Still used by banks alongside the PPSR notice, e.g. BDO ₱380, BPI ₱500

What Is a Chattel Mortgage on a Philippine Car Loan?

A chattel mortgage is the security arrangement that lets your bank hold a claim on your car until you finish paying the loan. Act No. 1508, the 1906 law that first used this name, is the Chattel Mortgage Law.

Banks still write "chattel mortgage" into contracts, even though the law behind that term changed in 2025.

Since 17 August 2018, RA 11057, the Personal Property Security Act (PPSA), has been the current law covering vehicle security interests.

Instead of recording a chattel mortgage deed, your lender now registers a notice in the Personal Property Security Registry (PPSR). The car stays yours to drive; the bank's claim sits in the registry until you pay it off.

Ano ang chattel mortgage sa Tagalog? No agency has stated an official Filipino-language definition.

In plain Filipino, our own rendering and not an official translation: ang sasakyan mo ang panagot sa loan hanggang mabayaran ito nang buo.

Every bank, including BDO and BPI, still uses "chattel mortgage" in its paperwork. RCBC and EastWest instead call their security document a Promissory Note with Security Agreement under RA 11057.

The name on the form varies; the registration now runs through the PPSR.

Is Chattel Mortgage Still Used in the Philippines After 2025?

Yes and no. Sections 1 to 16 of Act No. 1508, the parts that set up the old recording system, were repealed once the PPSA's transitional period ended.

Section 5(e) of RA 4136, the old law that let LTO record mortgages the same way, was repealed too.

The PPSR went live on 3 February 2025. From that date, the old Chattel Mortgage Registry stopped accepting new vehicle transactions, with narrow exceptions for aircraft and ships.

Its electronic version, eCMR, kept running for pending transactions until 29 August 2025.

Banks did not rewrite their vocabulary. BDO's fee page still lists an "LTO Encumbrance" charge.

UnionBank's terms still call its contract a "Promissory Note and Chattel Mortgage (PN-CM)" today. What changed is where the security interest gets filed, not the name lenders use for it.

This is a transitional regime: one law replaced another. The old vocabulary and the LTO's own encumbrance annotation on your car's CR both carried over into how banks describe the deal today.

How the Security Interest Gets Registered: The PPSR Notice

Registration happens between your lender and the LRA, which manages the PPSR as an online, administrative notice registry. It does not check whether your loan terms are fair; it only records what your lender tells it.

Here is how the notice gets filed:

1. Create your PPSR account

   Individual accounts at ppsr.lra.gov.ph are approved automatically. BDO and PNB both require this before they release your loan.

   • Email and mobile number
   • One government ID
   • TIN
2. Bank files the Initial Notice

   Your lender, as the secured creditor, registers a notice describing you as the grantor and your vehicle as the collateral.

   • Vehicle make, model, engine and chassis numbers
3. Pay the registration fee

   Payment runs through the PPSR's Linkbiz payment portal. The registration itself is ₱380; some banks add a small service fee, ₱7 to ₱25 depending on the paying bank.

4. Keep your registration number

   The PPSR issues a unique registration number as proof the notice is live. Keep it with your loan file.

What Banks Actually Charge: Chattel Mortgage and Encumbrance Fees

No bank states one combined figure for chattel mortgage costs. Each states separate line items, and the amounts do not match each other:

Metrobank's own pages disagree with each other on the handling fee. Both figures are shown here rather than picked at random; Metrobank has not reconciled them.

After Full Payment: Releasing the Encumbrance

Paying off your loan does not automatically clear your car's record. Someone still has to file the paperwork to remove the encumbrance, and the steps differ slightly by bank.

A cleared encumbrance is usually the first requirement before you can sell the car or move the loan to someone else. See how to transfer a car loan for what comes after this section.

1. Bank issues cancellation documents

   BDO gives you a Release of Mortgage; BPI and China Bank give a notarized Cancellation of Mortgage plus your original promissory note.

   • Proof of full payment
   • Bank-issued cancellation document
2. File at the Registry of Deeds

   BDO, BPI and China Bank all route the notarized cancellation through the Registry of Deeds named in your loan contract. LTO will not act on it before that.

   • Notarized Cancellation of Mortgage
   • Original OR/CR
3. Present the vehicle at LTO

   Bring the RD-acknowledged cancellation, your OR/CR, and the vehicle itself for inspection at the LTO office where it is registered.

   • RD-acknowledged cancellation
   • Original OR/CR
   • Vehicle for inspection
4. Receive a clean Certificate of Registration

   LTO issues a new CR free of the encumbrance. The Registry of Deeds and LTO both charge their own fees for this step.

   • New, unencumbered CR

China Bank's standard release time for collateral documents is 15 banking days from full payment. Security Bank replies to a release request within 1 banking day. The request is free for loans booked from 2018 onward, and ₱700 for loans booked in 2017 or earlier.

Before You Sign: What to Verify

A chattel mortgage is a real claim on your property. Verify these before you commit to a lender.

Buying a Used Car? Check for an Existing Chattel Mortgage First

The PPSR lets anyone search its records under the Motor Vehicle class, free of charge. Run this before you pay a deposit on a used car; an unresolved encumbrance means the previous lender still has a claim on the vehicle.

For a transaction from before 3 February 2025, search the older system instead, at chattel.lra.gov.ph, by Registry of Deeds. Ask the seller directly for the PPSR registration number or the old CMR record before you pay.

See our car loan repossession guide for what happens if a secured loan like this one goes unpaid.