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Debt Consolidation in the Philippines: How to Settle Debts with a New Loan

Rouselle Isla

Rouselle Isla

Last updated July 01, 2023

Debts are a fact of life. Financially healthy people like employees, business owners, and even multimillionaires have them. 

As a financially responsible individual, you need to handle debts properly to get a good credit score. Some people, however, find it hard to cope with debts because their salary and financial capacity to pay their amortizations aren’t proportional to the credit they’ve borrowed.

Nevertheless, you can make repayments more manageable and efficient with one solution: debt consolidation.

What is Debt Consolidation in the Philippines?

Debt consolidation[1] is a method of simplifying your debts. It brings multiple debts together and turns them into one payment. 

It can be carried out in two ways: through a debt consolidation loan or the transfer of existing credit card debt to another credit card, also called balance transfer.

👉 How Debt Consolidation Works 

Think of it as putting Debt #1, Debt #2, and Debt #3 in one box. That single box will then turn the three debts into a single loan.

The said box will issue an invoice that states a fixed amount that you need to pay every month. When you pay that fixed amount monthly, you’re actually paying for the three debts you’ve put inside that box until the agreed term ends.

When is Debt Consolidation a Good Idea?

debt consolidation in the philippines - when is it a good idea

You can view debt consolidation through two lenses, both of which are obvious advantages. First, you can treat it as a practical way to stop paying high interest on your existing debts. Second, you can use it to organize manageable debts.

👍 You Need to Deal with High Interest Rates

Debt consolidation is a good idea if your debts, such as credit card bills, have high interest rates. A new loan with a lower interest rate will make it easier for you to pay down or pay off all your debts. Moreover, the payment schemes are actually manageable, albeit much longer.

👍 You Want to Organize Your Debts

It’s also a wise strategy if you want to organize a manageable size of debt. Multiple debts usually have different due dates, making monthly payments a hassle. But when you consolidate all your debts into one payment, you’ll have only one due date to remember. It’ll be easier for you to set aside repayment money and automate your monthly payments.

👍 You Want to Clear Your Debts Fast 

The great thing about a debt consolidation loan is that you follow a payment plan, helping you pay your debt a little faster. For example, if you want to settle your debts within a year, apply for a debt consolidation loan with a repayment period of not more than 12 months. 

If you have significant debt, a debt consolidation loan can also put you on a faster track to paying it off. Unlike credit card providers that don’t give you a timeline to pay off your balance, a debt consolidation loan has a fixed payment schedule with a clear start and end date.

Read more: 

When is Debt Consolidation a Bad Move?

debt consolidation in the philippines - disadvantages of debt consolidation

Debt consolidation has its pros and cons. However, the drawbacks aren’t usually given the spotlight. Here are the possible pitfalls to expect when you go for this debt management method.

👎 It Will Not Free You from Debts

Debt consolidation becomes a disadvantage when you think it will magically remove all your existing debts. Because your debts are rolled into a single payment, you may start feeling free of debt. That dangerous thinking may lead you into getting another debt.

👎 You Still Have to Pay Fees

Debt consolidation loans usually come with fees. When you move the outstanding debt of your credit card to another credit card, you may have to pay balance transfer fees. You may also need to cover other related expenses, such as annual fees and closing costs.

Also, there’s no guarantee that a debt consolidation loan, which is technically a new loan, will have lower interest rates. It will still depend on your lender and your credit score. Your monthly payments may even have a higher interest rate.

If you choose to pay less every month, the term of your debt consolidation loan will likely be extended. That also means extending the period of your interest payment. In the long run, you may end up paying more interest.

Avoid debt consolidation loans if you’re prone to missing payments as well. You’ll have to pay a lot more once the late payment fees start piling up.

Read more: 

Does Debt Consolidation Hurt Your Credit Score?

It depends. If you’re a diligent payer, you can improve your credit score. With just one due date to remember, you can easily set aside money or automate payments, helping you pay on time. Paying on time is one way to boost your credit.

However, consolidating your debts also poses risks that can hurt your credit. Take this situation, for instance: if you transfer the debts of your three other credit cards to a new credit card, that new credit card’s limit may get maxed out.

For creditors, this is a red flag. Your credit score might then be lowered.

7 Banks Offering Debt Consolidation Loans in the Philippines

debt consolidation in the philippines - debt consolidation loans

Again, there are two ways to consolidate your debts: one is through a debt consolidation loan, and the other is through the transfer of your credit card debt to another credit card. 

The second method may be pretty straightforward to understand, while the first may raise a couple of questions, as debt consolidation loans may sound foreign and technical to many.

Debt consolidation is a legitimate personal loan purpose. A lot of leading banks offer loan consolidation in the Philippines. But understand that not all banks offer personal loans that can be used for debt consolidation.

Here are the best banks to consider for a debt consolidation loan in the Philippines:

📌 Metrobank

Repaying several debts at once? Consider Metrobank's Personal Loan. You can borrow up to ₱1 million to fund your debt consolidation. 

The monthly add-on rate varies depending on the loan term you'll choose: 1.75% for 12 months, 1.50% for 18 months, 1.50% for 24 months, or 1.25% for 36 months. Rates are fixed, so you know how much to pay every month—a welcome change if you're tired of juggling multiple loans with different rates. 

Key features: 

  • Loan amount: ₱20,000 to ₱1 million
  • Monthly interest rate: 1.25% to 1.75%
  • Loan tenure: 12 to 36 months
  • Processing time: Up to seven working days

debt consolidation in the philippines - metrobank

📌 UnionBank

UnionBank offers a personal loan for debt consolidation that allows you to borrow up to ₱2 million with flexible repayment terms of up to five years. No collateral is needed for the UnionBank debt consolidation loan.

Its annual contractual rate or interest based on a 360-day period is 26.9%, which is relatively low. There are also charges for disbursement and closing.

You can get approved in as fast as 24 hours, so you can expect a quick loan disbursement. 

Key features:

  • Loan amount: Up to ₱2 million 
  • Monthly add-on rate: 1.29%
  • Loan tenure: One to five years  
  • Approval time: As fast as 24 hours

debt consolidation in the philippines - unionbank


Another great option for consolidating debts is a personal loan from BPI. Borrow up to ₱2 million with a BPI debt consolidation loan, and you don’t need to pledge collateral. Moreover, you can pay for up to 36 monthly installments, so you can enjoy lower monthly payments. 

Loan proceeds are disbursed quickly and safely to your BPI account as well. You can also conveniently pay online via various payment channels or BPI’s auto-debit facility. 

Key features:

  • Loan amount: ₱20,000 to ₱2 million
  • Monthly add-on rate: 1.2% 
  • Loan tenure: 12 to 36 months
  • Processing time: Five to seven working days

debt consolidation in the philippines - bpi


Get the financial help you need to manage your debts and pay for one loan instead. The RCBC Personal Loan is multi-purpose, meaning you can use it to fund a variety of needs, including debt consolidation.

You can borrow from ₱50,000 to as much as ₱1 million and pay for up to 36 months. With a competitive interest rate of 1.3%, you can enjoy lower monthly payments.

Key features:

  • Loan amount: ₱50,000 to ₱1 million
  • Monthly add-on rate: 1.3% 
  • Loan tenure: Six to 36 months
  • Approval time: Within five to seven days

debt consolidation in the philippines - rcbc

📌 CIMB Personal Loan

You can also get a loan from CIMB Bank to consolidate your debts. It's a fully digital personal loan that you can easily apply for online. You can also get approved in minutes!

You can borrow up to ₱1 million and pay for up to 36 months. The monthly add-on rates are competitive, ranging from 1.12% to 1.95%. These correspond to APRs of 24%, 30%, or 36%.

Key features:

  • Loan amount: ₱30,000 to ₱1 million
  • Monthly add-on rate: 1.12% to 1.95%
  • Loan tenure: 12 to 60 months
  • Approval time: Within 24 hours

debt consolidation in the philippines - cimb

📌 Tonik Big Loan

Got multiple debts with large amounts to consolidate? Check out the Tonik Big Loan, which allows qualified Filipinos to borrow up ₱5 million. Its monthly contractual rate is 0.5825% and its APR is 6.99%.

Note that unlike most of the loans on this list, the Tonik Big Loan is a secured loan. You need an asset you can declare as collateral—in this case, a condominium title in Metro Manila.

Key features:

  • Loan amount: ₱250,000 to ₱5 million
  • Monthly contractual rate: 0.5825%
  • Loan tenure: 12 to 60 months
  • Processing time: Within seven days

debt consolidation in the philippines - tonik big

📌 SB Finance

An SB Finance Personal Loan is also a good option for debt consolidation in the Philippines. Borrow anywhere from ₱30,000 to as much as ₱2 million and pay for 12 to 36 months. 

Its annual percentage rate starts at 39.53%, with an estimated APR of 37.53% for 36 months. So for a sample computation for a ₱50,000 loan with a payment period of 36 months using the APR of 37.53%, your payment for your debt consolidation would be ₱2,333.89 per month.  

Key features:

  • Loan amount: ₱30,000 to ₱2 million
  • Monthly add-on rate: 1.89% 
  • Loan tenure: 12 to 36 months
  • Approval time: Within five banking days

debt consolidation in the philippines - sb finance

With these details from leading banks, you can get a picture of what a debt consolidation loan in the Philippines may look like. It’s also worth visiting your trusted bank to know if its personal loan can be used for debt consolidation. Different financial institutions may have different requirements for that specific loan purpose.

Read more: 

4 Things to Look for in a Debt Consolidation Loan

debt consolidation in the philippines - things to look for

Don’t get the first debt consolidation loan you see. Check the following before you submit your application: 

✔️ Approval Requirements

Most loans for debt consolidation in the Philippines require a good credit report and payment history, as well as a stable income for repaying the loan. In short, there shouldn't be red flags that indicate you're a big risk.

If you have a less-than-stellar credit report because of unpaid loans or credit cards, hence the need to consolidate your debt, look for other debt consolidation loans in the Philippines with easier requirements or more flexible approval criteria.   

Consider also getting a secured loan if you need a high loan amount and have an eligible asset, such as your house or car, that you can pledge as collateral.

✔️ Fees and Interest Rates

Debt consolidation loans in the Philippines often advertise low rates, but they’re not always guaranteed. The actual rates will still depend on your credit. Also, factor in origination fees, late fees, and pre-payment penalties. 

Make sure to get different quotes from lenders. Compare and then fully understand the terms and conditions to know what interest rate you’ll be paying. 

✔️ Loan Amount and Repayment Options

If you have a significant amount of debt to consolidate, you’ll need a bigger loan with a longer repayment period. Many banks and financial institutions offer different loan amounts, so do your research to find a debt consolidation loan that can pay all your unpaid loans with repayment terms suited to your budget.  

✔️ Customer Service

If you’re getting a debt consolidation loan, make sure it provides several customer service options. If customer service facilities like chat, email, or 24-hour hotlines are important to you, ensure that the debt consolidation loan provider offers them before sending in your application.

Final Thoughts

If you need to manage your debts, debt consolidation in the Philippines can be a good option. However, you must think things through first, especially if this is your first time using this debt management strategy.

First, if your debts are still manageable, try to find other ways to deal with them. You can sell items you don’t need anymore or add another income stream, such as a part-time job. 

Second, if you decide that this is the best way to manage your debt, find out if you can avail of lower interest rates and calculate the fees that come with the new loan. Ultimately, stick to new money-saving habits that will help you put your debt under control.

Looking for more debt consolidation loan options? Compare these personal loans and apply easily through Moneymax: 

Personal Loan 
Minimum Loan Amount
Maximum Loan Amount
Monthly Add-on Rate
Minimum Annual Income
Approval Time
UNO Digital Bank Personal Loan
uno digital bank
Compare Now
1-2 days
Metrobank Personal Loan
Compare Now
₱1 million
1.25% to 1.75%
7 days
UnionBank Personal Loan
Compare Now
₱2 million
24 hours
BPI Personal Loan
bpi logo
Compare Now
 ₱2 million
5 to 7 banking days
RFC Loan
Compare Now
As fast as 24 hours
Tonik Flex Loan
Compare Now
Starts at 1.7%
1 banking day
Tonik Quick Loan
Compare Now
Starts at 4.26%
As fast as 1 hour
Tonik Big Loan
Compare Now
₱5 million
7 days
Tala Loan

Compare Now

24 hours
HSBC Personal Loan
Compare Now
5 to 7 banking days
CIMB Personal Loan
Compare Now
₱1 million
As fast as 24 hours
Maybank Personal Loan
Maybank logo 2011-1
Compare Now
₱1 million
5 to 10 banking days
RCBC Bank Personal Loan
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₱1 million
5 to 7 banking days
SB Finance Personal Loan

Compare Now
₱2 million
5 banking days
CTBC Bank Personal Loan
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 ₱2 million
1.39% to 1.79%
1 to 5 banking days
PSBank Personal Loan
Compare Now
1.75% or 2.5% 
5 to 9 banking days

Source: [1] What Is Debt Consolidation and When Is It a Good Idea? (Investopedia, 2023)

Rouselle has over eight years of writing experience in the personal finance niche. She has written feature stories, articles, and how-to guides on various personal finance and trending lifestyle topics. Before that, she briefly worked in banking and was a licensed life insurance advisor. When not writing, Rouselle likes to read books and binge-watch films and series. Follow Rouselle on Linkedin.


Use a personal loan to consolidate your outstanding debt at a lower interest rate!

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