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Or just click on the option that appears in Bitcoin Core?
I'm confused 
I expected this to require installing additional software.Quote
Is it viable to use a VPN system that allows SOCKS5?
Bitcoin Core will just work with any normal VPN service (but that's not Tor).I mean, do you need to have Tor installed on your PC or not?
Yes, you need to have Tor installed and running. You also can configure Tor running as service / run on boot for convenience.
By any chance, I have VPN that gives me onion IP. Would it be an option?
I don't know the answer. However it's first time VPN claim they can give onion address (rather than allow or can access onion address without Tor Browser).