August 15, 2023

Most Common Types of Loans in the Philippines

Loans come in different needs and terms. There are different types of credits offered by lending companies. But it’s important to understand your options to determine which one best suits your needs. This handy guide explains the key features of each of the most commonly offered loans so you can choose which one of best fits your requirements – and the ones you should avoid.


The best personal loan for you is one that can help you meet your financial goals or immediate cash need while making it easy for you to repay the loan. Fairly often, a personal loan is borrowing money without collateral. Because there is no home or car to repossess if you don’t make your payments, these loans are considerably riskier for lenders.

In addition, you can use online personal loan calculator to find out your monthly payment amount. Just select the loan amount and loan tenor to see what works for you. If you are planning to apply, here are some tips to pass that credit check and easily get an approval:

  • Have a good credit history;
  • Maintain a savings account;
  • Supply only factual information;
  • Aim for a realistic loan principal;
  • Be patient;
  • Compare interest rates and loan terms.


For most working-class Filipinos, buying a house is the pinnacle of many years of hard work and dedication. It is usually considered an accomplishment considering the time, hard work, and dedication it will take to save up for a decent house in a secured location. A housing loan is the money that a bank or a financial institution offers you to buy a property, or renovation of an old house, construction, or refinancing.

Documents required for home loan

  • Completed and signed housing application form;
  • ID & Address proof;
  • Residence proof;
  • Income Documents (Financial documents declaring your income);
  • Property Documents (Property related documents).

Your housing loan application might be rejected due to several factors such as:

  • Not qualifying for a loan does not necessarily mean you are not qualified for home ownership;
  • You do not meet the qualification criteria such as age limits of 21 to 65 years;
  • If you failed to provide any documents, forms, or other evidence.


Since a car is not cheap, auto loans let’s borrower to loan money from a bank or private lender to purchase a car. There are two ways to avail for auto loans with major banks. One is the traditional way where the bank has an inventory of cars (usually provided by affiliates) that the client can choose from. The other method is for the client to pick their car of choice (usually for second hand cars), and the bank provides for a used car loan. The loaned amount will either be disbursed directly to you or to the auto dealer.

6 steps to apply for a Car Loan Financing:

  1. Consider your finances. Consider your gross monthly income and think of the amount of a car you think you can handle.
  2. Choose a car. Most lenders depends their loan on the price of the car you want to buy.
  3. Auto Loan Calculator. Compare the car loans offered by lenders with the use of the auto loan calculator.
  4. Check the eligibility and requirements. Lenders vary their requirements.
  5. Apply online. Make sure your personal information is secured.
  6. Wait for a Confirmation.

If you have enough cash to pay the car at once, then good for you, yet if you don’t have enough money and you think you can pay in instalment, then you can use a car loan. Here are the list of leading banks offering car loans:

  • BPI;
  • PBCOM;
  • PS Bank;
  • UnionBank;
  • BDO;
  • AUB;
  • Plantersbank;


The SSS (Social Security System), or the social insurance program for private employees in the Philippines, offers two types of loans: salary and calamity loans. Salary loan serves as a ready-benefit program with terms that cater to majority of employees in an accredited company. If you run out of money and you need a rather small amount to pay for something that is urgently needed, then you might want to opt for salary loans. You may borrow an amount as small as 15 000 or less pesos and this will be given to you shortly. The great advantage of collateral loans is that you can get them almost immediately.

In order to avail of a salary loan from SSS, members must completely fill out a Member Loan Application form. They can submit this form to the SSS branch closest to their place of work or residence.


Business loan is just perfect for your startup investment. If you are looking for lowest interest rate option, a collateral loan would definitely be the best choice. There are different banks that offer business and personal loans to individuals who are interested in franchising:

  • BPI Family Savings Bank;
  • BDO;
  • PNB;
  • PSBank;
  • Land Bank.


Good news for Overseas Filipino Workers (OFWs) is that government agencies and banks in the Philippines now offer OFW lending services for a variety of purposes – be it money for your family back home, paying for your child’s tuition fee, to house and car purchases.


  • Filipino Overseas Workers with valid contracts;
  • Must be at least 21 years old or not less than 65 years old upon loan maturity;
  • Minimum basic salary equivalent to at least PHP 30,000;
  • Must be employed for at least 2 years;
  • OFWs outside the Philippines may also apply (ask us about the Pinoy Abroad loan!);
  • Must have a Co-borrower.

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