In short
Three major banks, UnionBank, EastWest and RCBC, state plainly in their auto loan contracts. You need the lender's prior written consent before you sell, transfer or dispose of the car.
Skip that step and RCBC's own contract sets a penalty of PHP 20,000 or 50% of your outstanding balance, whichever is higher. This guide lays out the legitimate way to transfer a car loan and what banks charge for it.
It also covers where the process still needs a call to your lender or the LTO.
- Consent required before any transfer
- Yes, from your current lender, in writing
- Banks confirming this in their own contracts
- UnionBank, EastWest, RCBC
- RCBC transfer of ownership fee (auto)
- PHP 3,500
- Metrobank change of registered owner fee
- PHP 5,000 (shared home and car loan fee table)
- RCBC penalty for an unauthorized sale
- PHP 20,000 or 50% of outstanding balance, whichever is higher
- LTO transfer of ownership fee
- Confirm with your LTO district office
Do you need your lender's consent to transfer a car loan?
Yes. A vehicle bought on a loan carries a chattel mortgage or a registered PPSA notice against its Certificate of Registration.
That notice stays until the loan is fully paid. That security interest is what a pasalo or assume-balance deal tries to work around.
UnionBank's auto loan terms state you shall not "assign, sell, pledge, mortgage, or otherwise dispose of or encumber" the car. Doing so needs the bank's prior written consent first.
EastWest's terms use almost the same wording: the borrower "shall not sell, transfer, assign, lease, dispose of, hypothecate" the vehicle. RCBC's Promissory Note with Chattel Mortgage bars any sale "without the previous written consent of the Mortgagee".
This is why most pasalo arrangements found on Reddit, Facebook and Tsikot are informal. The buyer and seller agree between themselves, sign a deed of sale, and never contact the bank.
The loan stays in the original borrower's name and the consent requirement goes unmet.
- Security interest on the car
- Chattel mortgage or PPSA notice, registered against the LTO Certificate of Registration
- Consent required from
- Your current lender, in writing, before any sale, transfer or assignment
- Banks whose contracts state this directly
- UnionBank, EastWest, RCBC
What happens if you sell a financed car without telling the bank?
The loan contract still binds the original borrower, even after the car changes hands informally. RCBC's Promissory Note with Chattel Mortgage sets the penalty for an unauthorized sale at PHP 20,000 or 50% of the outstanding obligation, whichever is higher.
EastWest's terms go further. Sell the car without consent anyway, and the sale proceeds are "held in trust" for the bank, not yours to keep.
UnionBank's contract also covers later restructurings or novations of the loan. So the bank's claim follows the car and the paperwork, not just whoever's name sits on it.
None of the three contracts allow a grace period or an exception for a private pasalo deal. Get the bank's consent before the sale, not after the buyer already has the keys.
How to transfer a car loan the right way
There is a legitimate path if your bank agrees. None of the three contracts state it as a named, self-service product, so expect to work through your loan officer rather than an online form.
If the new buyer wants to see what a bank typically asks of a fresh applicant, check car loan requirements before you start.
- Notify your current lender in writing
Tell the bank you want to sell or transfer the vehicle to a named buyer. Do this before any deed of sale is signed or money changes hands.
- Written notice naming the buyer
- Your loan account number
- Get the bank's written consent
No lender states a formal loan-assumption procedure. So ask your loan officer directly what the bank needs from the new buyer, and get the approval in writing.
- Buyer's income or ID documents, if the bank requests them
- Bank's written approval letter
- Pay the bank's change-of-registered-owner fee
Fees differ by bank. Metrobank charges PHP 5,000 for a change of registered owner or substitution of collateral. RCBC charges PHP 3,500 for its transfer-of-ownership facilitation fee, plus PHP 3,500 for cancelling an annotation or lien where that applies.
- Bank fee payment receipt
- Update the LTO Certificate of Registration
Once the bank approves, the new owner still has to be recorded at LTO. LTO's current fee and form requirements for this step are not confirmed here. Confirm both directly with your LTO district office or your bank's loan officer before you proceed.
- Bank's approval letter
- Deed of sale
- Valid IDs of both parties (confirm the exact list with LTO)
What banks charge to transfer a car loan
These are the only transfer-related fees stated on lender fee pages as of 27 September 2026. Check RCBC's auto loan page or Metrobank's auto loan page before you budget, since banks update fee schedules without notice.
BPI, BDO, Security Bank, Maybank, UnionBank and EastWest state no figure for this transaction. That does not mean they charge nothing, only that no public number exists to cite.
| Bank | Fee | What it covers |
|---|---|---|
| Metrobank | PHP 5,000 | Change of registered owner or substitution of collateral (fee table covers home and car loans together) |
| RCBC | PHP 3,500 | Facilitation and handling fee, transfer of ownership, auto loans |
| RCBC | PHP 3,500 | Cancellation of annotation or encumbrance |
| RCBC | PHP 3,500 | Cancellation of lien |
What LTO charges to transfer ownership: the unconfirmed part
No confirmed source states what LTO charges for this part of a car loan transfer. The fee for annotating or cancelling an encumbrance, the exact transfer-of-ownership form, and any turnaround time all remain open on the LTO side.
Treat any LTO fee figure you see on a forum or blog post as unverified until you confirm it yourself. The bank-side fees in the table above are the only figures confirmed here.
There is no confirmed LTO fee for this step yet. Call your LTO district office, or ask your bank's loan officer, for the current transfer fee and form list before you budget for it.
Before you agree to a pasalo deal, check this
Most pasalo problems start the same way: money changes hands before the bank knows about the deal. Confirm consent first.
See expressway.ph's chattel mortgage guide for what stays on your Certificate of Registration until the loan is paid off.
See how to refinance a car loan instead if you are moving the loan to a cheaper bank rather than to a new owner.
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