PHILIPPINES PERSONAL LOANS
Lenders in the Philippines offer different types of personal loans to potential borrowers who need immediate cash to fund an important expense. These loans cater to different needs and financial capabilities. Never make the mistake of applying for a personal loan without researching and understanding the various choices available for consumers. Find out what personal loans will work for you and eliminate the ones that do not fit your needs. If you plan to get one, make sure you familiarize yourself with the personal loan types in the market so that you know your options and can choose the right loan for you.
Common features of personal loans in the Philippines
All personal loans issued by different commercial banks in the country share three common features:
- Fixed loan term
Most banks require monthly repayments over a period of 12, 18, 24, or 36 months. If you choose a shorter loan term, you will pay a higher monthly balance but at a lower interest rate than if you choose a longer loan term.
- Fixed loanable amount
You can borrow from Php 10,000 up to Php 2 million, subject to the lender’s approval. The actual amount that the issuing bank may lend you will be based on your income and credit history. A high income and a good credit history can raise your chance of getting approved for a higher loan amount.
- Fixed interest rates
Except for a few ones with variable interest rates, most personal loans come with fixed interest rates; they do not change throughout the duration of the loan.
Different types of personal loans
As a prospective borrower, you need to figure out which type of personal loan and rates will suit your needs, save you on costs, and help you achieve your financial goals. Personal loans in the Philippines vary according to what they are used for and whether or not they require collateral from the borrower.
Types of personal loans based on purpose
Personal loans are essentially multi-purpose loans, so they can be used to meet a wide variety of financial needs. Generally, Filipinos get personal loans for the following reasons:
- Personal installment: Borrowing money and paying it back to the lender (loan principal plus interest) in fixed monthly installments over 12 to 48 months.
- Debt consolidation: Managing one’s debts by consolidating all credit card debts and other loans into a single personal loan that offers better terms.
- Home improvement: Improving your home’s value by covering the costs of renovation, repair, or remodeling projects.
- Travel: Funding travel expenses in your dream destination.
- Education: Financing school fees for one’s children. You can also get an educational loan to take up a postgraduate degree. Compared to student loans, you can use an educational loan to pay for fees in any school.
- Investment: Growing money through investments in stocks, mutual funds, and real estate, among others.
- Electronics: Purchasing gadgets and electronic equipment needed for your business such as mobile phones, tablets, and computers.
- Business: Covering the costs of starting or expanding a business such as purchasing equipment and increasing your working capital.
- Medical bills: Paying the costs of medical treatments or surgeries. Medical loans are helpful in managing the high costs of hospitalization and medicines.
- Auto loan: Financing a new or used car.
- Wedding: Covering the costs of your dream wedding. With weddings in the Philippines costing from Php 50,000 to over Php 1 million, a wedding loan can help you pay for everything before your big day.
