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Personal Loans Guide | Moneymax

Borrowing money is not always bad, as long as it is done responsibly and for the right reason. Case in point: getting a personal loan to generate long-term income, like starting or expanding a business. Personal loans are also helpful in financing life milestones like weddings and immediate needs like medical bills and tuition fees. Are you thinking of getting a personal loan? Get to know what it is exactly and the important details to remember before you apply for a loan. Here is everything first-time borrowers need to know about personal loans:

What is a Personal Loan and How Does It Work?

When you get a personal loan, you are formally borrowing money from a lender to fund your personal expenses. You are expected to pay back the money you owe, plus interest and fees. Personal loans are also known as unsecured loans because lenders do not require collateral from prospective borrowers. Filipinos typically use personal loans for these purposes:
  • Medical emergencies
  • Home improvement
  • Debt consolidation
  • Education
  • Business opening or expansion
  • Wedding
  • Travel/vacation
  • Furniture/appliances/gadgets
Getting a personal loan is a straightforward process. In the Philippines, it generally involves these steps:
  1. Comparing personal loans. Never skip this step because it will help you find the right personal loan for you. Compare different loans offered by banks based on the loan terms, loan amount, interest rates, fees, and repayment amount and terms.
  2. Personal loan application. Once you have picked the best personal loan, check if you qualify for the loan. If you do, you can start applying online or at the branch of the bank. You will submit the required documents as proof of your identity and income.
  3. Loan processing. Banks conduct credit history checks to determine your capacity to repay your loan. The bank will notify you if your loan is approved.
  4. The release of loan proceeds. In the Philippines, banks fund personal loans either by issuing a manager’s check or crediting the loan amount to the borrower’s deposit account.
  5. Repayment of the loan. You will pay your monthly installments until the end of the loan term through post-dated checks, automatic debit from your deposit account, or over the counter.
  6. Loan closure. When you make your final repayment, your loan will be closed.

What are the Advantages and Disadvantages of Personal Loans?

Just like any financial product, personal loans come with benefits and drawbacks, which make them either suitable or unsuitable to certain kinds of borrowers. If you are not sure yet if getting a personal loan is the right decision for you, consider its pros and cons.

Pros of a personal loan:

  • Lower monthly interest rates than credit cards. Monthly interest rates on personal loans range from 1.20% to 1.94%, while credit card interest rates go from 2.00% to 3.54%
  • Ability to choose a loan repayment period. If you choose a longer period, your monthly repayments are lower, but you will be charged a higher interest rate.
  • Fixed interest rates and monthly repayment amounts. This helps you manage your finances more easily.
  • The borrower’s risk is lower than a secured loan. Because no collateral is required to take out a personal loan, you will not lose any of your assets.

Cons of a personal loan:

  • Higher interest rates than secured loans (that are guaranteed by collaterals)
  • Banks charge a pre-termination fee when you pay off your loan early.
  • There are penalty fees for late repayments. If not managed well, the unpaid amounts might snowball into a bigger debt.

How do Personal Loan Interest Rates Work?

Personal loan providers charge an interest on the amount borrowed that must be paid every month. Personal loans have lower interest rates than credit cards, making them a great choice for those who need quick cash for emergencies. But because personal loans are generally unsecured (meaning they are collateral-free), their rates are higher than secured loans such as auto loans and housing loans.

What is the difference between effective rate and add-on rate?

Banks that provide personal loans charge two sets of interest rates: monthly add-on rates and effective annual interest rates. The add-on rate is the interest that the lender charges every month on the amount you plan to borrow. On the other hand, effective interest rates show the actual cost of borrowing money. It includes the administrative or service fees that the bank charges for processing your loan application. This is why the effective interest rate—the one you’ll need to pay—is typically higher than the add-on rate.

What are Personal Loan Fees?

Personal loan providers charge various fees from a borrower’s loan proceeds. Thus, the amount you will actually receive will be less than the loan amount you have applied for. When you apply for a personal loan, find out all the fees that will be taken away from your approved loan amount. Know also the consequences of paying off your loan before maturity or past the due date.

Personal loan fees in the Philippines

  • Processing fee. A fixed fee, ranging from Php 1,300 to Php 2,500, to cover the costs of processing your loan application such as administrative costs and credit investigations.
  • Pre-termination fee. An amount equivalent to 5% or 8% of your remaining balance that the bank charges if you pay off your loan before it matures. Also known as early payment, installment acceleration, or closure handling fee.
  • Late payment penalty. 3% to 8% of your unpaid balances per month. To avoid paying this penalty, make sure you pay your monthly balances on or before the due date.
  • Documentary stamp fee. A tax required by the Bureau of Internal Revenue (BIR) on loan agreements in the Philippines: Php 1 for every Php 200 in excess of Php 250,000 loan amount (regardless of purpose) or Php 1 for every Php 200 for business loans (regardless of the loan amount). Not applicable for loan amounts of Php 250,000 or lower.
  • Returned check fee. A fee for each returned check (from Php 200 to Php 2,000) due to insufficient funds, stop payment order, closed checking or current account, or erasure or alteration on the check.
After reading all the basic information about personal loans, you should be able to determine if it fits your current financial needs. If so, you can move on to knowing the requirements and qualifications for obtaining a personal loan.

What are the Personal Loan Requirements?

Before proceeding with your personal loan application, check first if you are eligible for a loan and then prepare the required documents.

Eligibility requirements:

  • At least 21 years old
  • Filipino citizenship (some banks accept applications from foreigners living in the Philippines)
  • Minimum gross income set by the bank
  • Proof that you are credible as a borrower, such as having a good credit history

Documentary requirements:

  • Valid government-issued IDs
  • Pay slips for the last 3 months
  • Latest income tax return
  • Certificate of employment
  • Audited financial statements in the last 2 to 3 years and SEC or DTI registration (for self-employed people)

Where to Apply for Personal Loans

Commercial banks in the Philippines are among the most credible lenders of personal loans. For more convenience, you can opt to apply at the bank where you have an existing deposit account. You can apply for a personal loan in any of these banks:
  • Asia United Bank
  • BDO
  • BPI
  • China Bank
  • EastWest Bank
  • Maybank
  • PlantersBank
  • PSBank
  • RCBC
  • Robinsons Bank
  • Security Bank
  • Sterling Bank of Asia
  • UCPB

How to Apply for a Personal Loan

Applying for personal loans online is a convenient option for busy professionals and those with a busy lifestyle, who barely have time to go to the bank to file their loan application. You can complete the entire process in just a matter of minutes. Considering to skip the trip to the bank? Here are the steps for online personal loan applications:

1. Fill out an application form for personal loans online.

Go to the website of your bank and look for the personal loan application form. Enter the required information about yourself, your job and income, the loan (e.g., purpose, amount, payment term, etc.), and other details. Make sure you provide correct and complete information. If you miss or skip any fields on the form, the processing of your application will take longer, as the bank will need to contact you to ask for the missing details.

2. Prepare and send the required documents.

Scan or take clear photos of the documents required for your personal loan application. You will either email the scanned copies or photos of your documents or attach these files to the personal loan online application form. You will also have to read the terms and conditions to complete your application.

3. Wait for confirmation from the bank.

Your online loan application is complete! You will just have to wait for confirmation through email or SMS that the bank has received your application. The bank may also contact you for further instructions. Banks typically process applications within five to seven working days. If you get an approval on your online personal loan, the bank will either issue a manager’s check or credit the loan amount to your deposit account with the bank.

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:

1. 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.

2. 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.

3. 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.

What are the 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 a 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.

Types of personal loans based on collateral

Secured personal loans

To get a secured personal loan, you need to put up a collateral (property, vehicle, or deposit account) as security for the bank. When the borrower fails to pay it off, the lender can take the collateral to recover the unpaid amount. Because of the lower risk for the bank, secured loans have higher loan amounts and lower interest rates than unsecured loans. In the Philippines, only BDO offers a secured personal loan to overseas Filipino workers, requiring BDO bank account deposits as collateral.

Unsecured personal loans

Also called an unsecured loan, a non-collateral personal loan is issued by a bank or any financial institution without requiring any type of collateral from the borrower. Most personal loans in the Philippines are unsecured or non-collateral loans. With an unsecured loan, you can borrow from Php 10,000 to Php 1 million that is repayable in 12 to 36 months. Some of the major banks that issue no-collateral personal loans in the country include the following:
  • BDO. Employees and self-employed individuals can avail of an unsecured loan from Php 10,000 to Php 1 million at annual interest rates ranging from 25.98% to 26.76%. Unsecured personal loans for OFW borrowers are also available through the bank’s Asenso Kabayan Program.
  • BPI. The bank offers loan amounts from Php 20,000 to Php 1 million at 25.03% to 25.74% annual
  • EastWest Bank. The bank’s personal loan amount is Php 25,000 to Php 2 million. For existing credit cardholders, the annual interest rates range from 41.62% to 41.94%. The interest rates are higher for non-credit card owners at 46.92% to 53.21%
  • Maybank. Maybank’s collateral-free personal loan from Php 50,000 to Php 1 million can be obtained at a 1.3% monthly interest rate.
  • Security Bank. The bank lends a minimum of Php 30,000 up to Php 1 million with interest rates starting from 29.48%.

Differences between secured and unsecured personal loans

With an unsecured loan, the risk is higher for the lender, so it typically comes with a lower loanable amount and a higher interest rate. Personal loans without collateral are guaranteed by a borrower’s creditworthiness instead of a collateral. So if your credit standing is good, you will have a greater chance of approval than someone with a bad credit history. When you apply for an unsecured loan, you will need to prove to the lender that you have a stable income and can make monthly repayments on your loan. Banks ask personal applicants to submit proof of income to determine their capacity to repay a loan. So you need to prepare supporting documents such as income tax returns, pay slips, and certificate of employment to the bank to get approved for an unsecured loan.

What personal loans are available from banks?

Aside from the government-issued multi-purpose loans, commercial banks are also legitimate providers of personal loans. Most banks in the country offer these loans to qualified Filipinos and foreign residents in the Philippines. Typically, they process personal loan applications in as fast as one week. Here is a quick look at the personal loans issued by different banks in the Philippines:

AUB CasHelp

  • Loan amount: Php 30,000 to Php 250,000
  • Loan term: Maximum of 36 months
  • Interest rate: Subject to bank’s approval

BDO Personal Loan

  • Loan amount: Php 10,000 to Php 1 million
  • Loan term: 6, 12, 18, 24, or 36 months
  • Monthly interest rate: 1.30% (for a 6-month term) or 1.25% (for all other terms)
  • Effective interest rate: 25.98% to 26.76%

BPI Personal Loan

  • Loan amount: Php 20,000 to Php 1 million
  • Loan term: 12, 18, 24, 30, or 36 months
  • Monthly interest rate: 1.20%
  • Effective interest rate: 25.03% to 25.74%

China Bank Savings Easi-Funds Personal Loan

  • Loan amount: Php 20,000 to Php 1 million
  • Loan term: 12, 18, 24, 36, or 48 months
  • Monthly interest rate: 1.55% to 1.95%
  • Effective interest rate: 32.73% to 37.24%

EastWest Personal Loan

  • Loan amount: Php 25,000 to Php 2 million
  • Loan term: 12, 18, 24, or 36 months
  • Monthly interest rate: 1.49% to 1.89%
  • Effective interest rate: 41.67% to 53.21%

Maybank enAble Personal Loan

  • Loan amount: Php 50,000 to Php 1 million
  • Loan term: 12, 18, 24, or 36 months
  • Monthly interest rate: 1.30%

PBCOM Personal Loan

  • Loan amount: Php 40,000 to Php 1 million
  • Loan term: 12, 18, 24, 36, or 48 months
  • Monthly interest rate: 1.332% to 1.96%
  • Effective interest rate: 28.40% or 37.40%

PSBank Flexi Personal Loan with Prime Rebate

  • Loan amount: Php 20,000 to Php 250,000
  • Loan term: 24 or 36 months
  • Monthly interest rate: 1.75% (fixed term) or 2.5% (revolving credit line)

RCBC MyCash Loan

  • Loan amount: Php 50,000 to Php 1 million
  • Loan term: 6 to 36 months
  • Interest rate: Subject to bank’s approval

Robinsons Bank Personal Loan

  • Loan amount: Php 5,000 to Php 250,000
  • Loan term: 6, 9, 12, 18, 24 or 36 months
  • Interest rate: Subject to bank’s approval

Security Bank Personal Loan

  • Loan amount: Php 30,000 to Php 1 million
  • Loan term: 12, 18, 24, or 36 months
  • Monthly interest rate: 1.39% to 1.69%
  • Effective interest rate: Starts at 29.48%

Sterling Bank of Asia Personal Loan

  • Loan amount: Php 50,000 to Php 1 million
  • Loan term: Maximum of 36 months
  • Interest rate: Subject to bank’s approval

UCPB SalarEasy Loan

  • Loan amount: Php 50,000 to Php 300,000
  • Loan term: 6, 12, 18, 24, or 36 months
  • Interest rate: Subject to bank’s approval
Now that you have a better idea of the various personal loans in the Philippines, you can decide better which ones would make the cut. Weigh the benefits and drawbacks of your top choices to determine the best personal loan that can help you meet your short-term cash needs.

Before you apply for a personal loan, you need to know first what you are getting yourself into. A wrong choice could easily put you in serious trouble with your finances. Finding the best personal loan takes quite some time and effort. But all will be worth it when you got the right one to meet your financial goals. Thus, it is very important to shop around and compare different personal loans in the Philippines. When comparing loans, consider crucial features such as eligibility, loan amounts, interest rates, fees, and repayment terms. So that you can more easily decide which personal loan is right for you, ask yourself these seven questions:

1. Do I qualify for this loan?

One of the first things you must look for when shopping around for a personal loan is the bank’s application requirements. You will just waste your time and effort looking for the best personal loan if you do not qualify for the one you have chosen. Personal loan providers set eligibility requirements to assess a potential borrower’s financial capacity to repay a loan. To qualify for a loan, you need to meet those requirements and be able to submit documents that prove it. Personal loan requirements vary from bank to bank, so check them out and consider only those loans where you are likely to qualify. Here are the requirements you need to check:
  • Minimum age and maximum age upon loan maturity
  • Minimum gross annual income (Some banks require higher annual incomes for self-employed individuals than salaried employees.)
  • Landline and/or mobile phone number
  • If the personal loan is exclusive only for employees of accredited or top 1,000 corporations

2. How much do I need to loan?

Decide how much cash you really need. Borrow too little and you will be unable to fully cover your expense. Borrow more than you need and you will be paying back more interest than necessary. Compute the amount you need carefully. When you already have an exact amount in mind, look for a personal loan with a loan amount range that matches the amount you will borrow. Check the minimum and maximum loanable amounts of each personal loan you are considering. If you need only Php 10,000, and a certain bank’s minimum loan amount is Php 30,000, look for a personal loan somewhere else.

3. Which personal loans have the best interest rates?

When choosing the best personal loan, around 57% of Filipinos pay the most attention to the interest rates, according to Bangko Sentral ng Pilipinas’ financial inclusion survey. Indeed, interest rates are a crucial consideration when you are deciding which personal loan suits you best. Interest rates influence how much the loan will cost you throughout your loan term. Thus, you have to look for personal loans with low interest rates because they can reduce the cost of your loan, helping you save money. Here is a list of banks in the Philippines that offer low interest rates on personal loans:

Personal loans in the Philippines with the lowest interest rates


Maybank’s enAble personal loan has one of the most affordable interest rates in the Philippines at 1.30% per month for employed and self-employed individuals. You can borrow as low as Php 50,000 or up to Php 1 million and repay it for 12, 18, 24, or 36 months through post-dated checks.


When you qualify for a BPI personal loan, you can enjoy a low monthly interest rate of 1.20% on an amount ranging from Php 20,000 to Php 1 million. You can choose to pay off your loan in 12, 18, 24, 30, or 36 months via auto-debit from your BPI deposit account.


BDO’s personal loan is available for qualified individuals who need to borrow at least Php 10,000 to Php 1 million. Its monthly interest rates vary according to your chosen monthly payment term: 1.25% for 12, 18, 24, and 36 installments and 1.30% for a 6-month repayment period.


PBCOM’s monthly interest rates for personal loans range from 1.332% to 1.960%. The loanable amount can go from Php 40,000 to Php 1 million, which is payable in 12, 18, 24, 36, or 48 months via auto-debit arrangement or post-dated checks.

Sterling Bank of Asia

One of the personal loans with low interest rates can be availed from the Sterling Bank of Asia. The bank offers a 1.45% month add-on rate to loan amounts from Php 50,000 to Php 1 million that can be paid off via post-dated checks from 12 months to 36 months.

Robinsons Bank

Available only to employees of JG Summit-accredited companies, Robinsons Bank’s personal loan comes with a monthly interest rate that starts at 1.40%. Customers can take a loan from Php 5,000 to Php 250,000 that can be paid in six, nine, 12, 18, 24, or 36 months via an auto-debit arrangement with a Robinsons Bank account or post-dated checks.


UCPB’s SalarEasy loan comes with an interest rate of 1.50% on amounts ranging from Php 50,000 to Php 300,000 payable in 12, 18, 24, or 36 months via post-dated checks.

EastWest Bank

If you have an existing credit card for at least one year, you can avail of a personal loan for as low as Php 25,000 and up to Php 2 million from EastWest Bank with a monthly interest rate that starts at 1.49%. However, if your credit card is less than a year old or if you do not have one, the interest rate for the loan is at 1.89%.

Security Bank

Security Bank offers a personal loan with amounts ranging from Php 30,000 to Php 1 million. The monthly interest rates vary according to the chosen repayment term: 1.39% (12 months), 1.49% (18 months), 1.59% (24 months), and 1.69% (36 months). Monthly installments are paid via post-dated checks.

4. How can I get the best personal loan rates?

Here are some tips to secure low interest rates on personal loans:
  • Find out and compare your personal loan options. Take out the guesswork and hassle of assessing various interest rates. Use a free comparison tool that can show you the best choices based on your needs.
  • Be strategic when choosing a loan amount and repayment term. Check each bank’s personal loan rates against each loan term and amount to see which ones are optimal. The longer the loan term, the higher the interest rate will be.
  • Maintain a good credit record. Banks impose higher interest rates on borrowers with poor credit history. If you have bad credit standing, it’s best to put your personal loan application on hold until you have improved your credit score by paying off your debts.
  • Consider borrowing from a bank where you have been a long-time customer. Having a long banking history with a bank increases your chances of getting an approval or a favorable interest rate, as it is a good proof of your capacity to repay your loan.

5. What personal loan fees do I need to pay?

Finding the best personal loans involves checking not just the interest rates. The fees and charges that add up to the cost of your loan also matter. So be sure to check them when shopping around for personal loans. All personal loans in the Philippines require borrowers to pay a processing fee ranging from Php 1,300 to Php 2,500 and a late payment penalty fee, which is a percentage (from 3% to 8%) of the unpaid balance. Some banks may also charge a pre-termination fee, returned check fee, and other personal loan fees. You must take these fees into account because they will affect your finances. For example, if you think that you might be able to pay off your loan before the end of its repayment term, then look for personal loans without a pre-termination fee.

6. How long will I have to pay off the loan?

Consider also the loan or repayment terms and which one will result in monthly payments you can afford over a reasonable period. In the Philippines, the shortest loan term is 6 months, while the longest is 48 months. A shorter loan term means higher monthly installments, but the interest rate is lower than those with longer terms. On the other hand, a longer repayment term comes with lower monthly repayments. But this can set you back in the long term with more expensive interest payments. If you can afford the higher monthly repayments, it makes sense to go for a shorter loan term. But if you prefer lower monthly repayments, a longer loan term would work even if it means you will pay more interest throughout the period.

7. How much will I pay back every month?

Of course, your monthly loan repayments should be affordable to you. You can check the possible monthly installments by using a personal loan calculator. A calculator may also allow you to view the maximum amount that you can borrow. Most banks have a personal loan calculator on their website, allowing borrowers to check how much money they can borrow. To use a loan calculator, you just need to enter your preferred loan amount and term. The online calculator will instantly show you the amount that you will have to pay monthly.   There is no single best personal loan for everyone. Different borrowers have different needs. Only you can figure out which loan is right for you. But you can only do that if you spend time and effort in checking and comparing your options.  

Managing Your Personal Loan Responsibly | Moneymax

Not all debt is bad. When used for the right reasons and managed responsibly, a personal loan can help you meet your short-term goals such as renovating your home, having your dream wedding, or funding your children’s education. On the other hand, failure to make timely loan payments will get you into serious financial woes, like getting buried in debt. Worse, it can hurt your credit history and make it hard for you to qualify for loans in the future. Has your personal loan application been recently approved? Congratulations! As early as now, start thinking of ways to avoid the costly mistake of mishandling a loan. Here are some actionable tips on managing your personal loan.

Understand the loan terms and conditions.

No matter how busy you are, make time to read the fine print that comes with your personal loan. This is an agreement between you and the lender that contains the guidelines on the use of your personal loan. Missing important information about your loan could lead to bad consequences, like paying fees and charges that you could have avoided had you read the terms and conditions carefully. When reading the fine print, look for these crucial details:
  • The date when your monthly installments will start and due date
  • Repayment terms
  • Any additional interest charges for missed payments and computation
  • Fees and charges you will be required to pay
  • Whether or not the bank will charge a prepayment fee if you fully repay your loan before it matures
  • Computation of your monthly installments
  • Situations when a borrower defaults on a loan

Set up a monthly budget and review it regularly.

You have a new personal loan to take care of, and this will affect your finances. You need to adjust your budget accordingly. Of course, you have to prioritize paying off the loan as fast as you can. This will keep you from incurring more debt than you can handle. Before you spend the money you borrowed, it is important to create a precise monthly budget first. Take into account how much you earn and spend every month. Include all your expenses no matter how small they may be. From there, determine how much of your income you can allocate for your monthly loan repayments. Make sure to set aside a fixed amount for repaying your loan. Take advantage of free apps that keep your budget in check. Also, review your budget regularly (at least every 6 months) to see which expense needs tweaking during changes in your income or unforeseen events that affect your finances.

Plan your personal loan repayment strategy.

If you fail to plan, you are planning to fail. This saying could not be truer when it comes to loan repayments. Having no concrete plan on how to pay off your loan is like setting yourself up for failure. Managing your personal loan responsibly starts with a plan. This is especially important if you have multiple debts to settle, such as credit cards and housing or auto loan. Look into how much you owe the bank, your loan’s interest rate, your monthly amortizations, and the loan term. Also, list down the due date of each of your loan. Such information will help you decide which of your loans need to be paid off first. The loan that gets prioritized will depend on your strategy for paying off your loans. It could be the loan with the lowest balance, the one with the highest interest rate, or the one with the earliest due date. Feeling overwhelmed with managing several loans? You might want to consider debt consolidation to make repayments easier and faster for you.

Use it for the right reason.

Having the right attitude and mindset about money is essential to managing your personal loan. Your loan is not free money—it has to be paid back with interest in monthly installments. In your personal loan application form, you indicated your purpose for borrowing money. Use the amount you loaned only for its intended purpose. It is easy to get sidetracked in situations when you think spending a portion of your loan amount would not hurt. It could be a nice pair of shoes or a relative who is borrowing some cash from you. Those tiny costs could add up and eat a chunk of your loan amount. Before you know it, you will barely have money left to spend for what you originally planned it for.

Monitor all your expenses.

Are you an impulsive buyer? Now that you have a new personal loan to manage, it is time to make some lifestyle changes to ensure that you will never go broke while paying off your loan. No matter how much money you are making, or whether you have recently given a raise, keep your spending to a minimum. Keep a watchful eye on your spending. If you don’t, you are more likely to overspend. And when you do, you might have spent your allocated amount for loan repayment without you realizing it. When your due date comes, you will be hard-pressed to pay on time. Be meticulous when keeping track of your expenses. Check your bank account balance from time to time. Keep all your receipts, billing statements, invoices, and other financial documents so that you know exactly where your every peso went. Another advantage of monitoring your expenses is that when you are already spending way too much, you will be able to adjust your budget right away, making sure that you still have money to repay your loan.

Find ways to increase your income.

Still struggling to pay off your monthly balances even if you always control your spending? Your income may not be enough to cover all your expenses, including your personal loan repayment. Consider getting an extra source of income, like a side business or a part-time job. This is just a small sacrifice to make compared to missing your monthly loan repayments and paying more interest in the long term.

Avoid taking on new debt.

Thinking of borrowing money again or applying for a new credit card to pay off your existing personal loan? Taking on more debt than you can actually afford is never a good idea. You will only run the risk of racking up more debt. Either you reduce your spending or increase your income. Better yet, do both.

Be diligent and disciplined in paying it off.

It takes a lot of discipline to be able to repay your personal loan every month. But if you are having a hard time keeping up with your obligations, an easy technique is to automate your monthly loan payments. Stay on top of your loan repayment by automating it via an auto-debit arrangement with your issuing bank. Some personal loan providers already set up automatic loan payments for their borrowers, helping them avoid missing or being late with their payments. That is one less thing to worry about. Just make sure you always have enough funds in your bank account every month for your loan repayment. If you’re paying via post-dated checks, be sure that your checking account always has sufficient balance to avoid a returned check fee from Php 500 to Php2,000 per bounced check. If it is possible, contact your lender to request an auto-debit arrangement for your personal loan repayment.

Make your personal loan payments on time.

Paying your balance past your due date will cost you more in the long run. The lender may impose additional interest charges for late payments. Moreover, you will have to pay a late payment penalty fee for every month that you are delayed with your payment. It could be around Php 500 or 5% to 8% of the amount past the due date. The late payment fee may not seem that much, but if you are trying to pay off your loan fast, that small amount clearly does not help with your goal.

Pay off in advance.

The longer you keep your loan around, the more interest you pay over time. So when you can afford it, pay off your personal loan early. You can do that by paying an amount higher than your monthly amortizations. Some personal loan providers in the Philippines charge a pre-termination fee, which is around 5% of your outstanding or remaining balance, if you pay off your loan or before its maturity date. If your lender does not charge this fee, then go ahead with your early loan repayment. But if it charges an early termination fee, check how much this will cost you before you decide whether to pay off your loan soon or not.

Communicate and negotiate with your lender.

Have you exhausted all means to manage your personal loan properly but you still fall behind your monthly payments? Do you foresee any financial difficulty coming up? Or there is a sudden financial emergency that has kept you or will keep you from making timely loan payments? If you find yourself in any of these situations, it is best to reach out to your lender, explain your case, and work with them to come up with a solution. It is better to be proactive now than just let things go out of hand and regret later on. You may request the bank to restructure your personal loan. This may reduce your monthly installment amount, extend your loan term, or reduce your loan’s interest rate. Of course, such loan restructuring comes with strict conditions that you will have to follow. Being a responsible borrower entails making every effort to pay off your loan as fast as possible so that you reduce its overall cost. As long as you are disciplined and determined to do so, you are on the right track.
There are two major types of personal loans in the Philippines: secured personal loans and unsecured personal loans. Secured personal loans require a collateral (property or vehicle, for example) while unsecured loans do not require any type of collateral from the borrower.
When taking out a loan, consider the following personal loan fees and charges that may add up to the cost of borrowing money: interest rate, late payment fee, early payment fee, returned check fee, and amendment fee. Know all about these loan fees here.
The bank may call you, send you a text message, or e-mail you about your loan approval. Most banks, however, do not inform applicants if they got approved for a loan or not. If needed, you may call the bank and ask for an update regarding your loan application. To know the common reasons why a personal loan is rejected, click here
It depends on the bank you applied with. Some banks transfer the loan money to the borrower's bank account while some may give it via check or cash.
This depends on the bank as well. Some banks require borrowers to pay their loan via bank deposit while others prefer automatic debit arrangement (a facility that allows banks to collect from customers by directly debiting their accounts).
Yes, you can get a loan from a bank that you don't have an account with. What's important is that you have enough documents from your current bank to prove that you can pay the loan.
The minimum amount you can borrow for a loan is P10,000.00 to P50,000.00 while the maximum amount is usually P1,000,000.00. This, of course, depends on the loan terms set by the bank.
You can get an emergency loan but not a personal loan from a bank. An emergency loan, however, is an expensive way to borrow money with interest rates between 1% to 1.5% per day. It also comes with very short terms, usually 30 days, giving you limited time to pay the amount you borrowed.
If you want to apply for a loan, you have to be at least 21 years old and have a permanent residence in the Philippines. You must also meet a minimum income requirement, which you can verify to the bank by presenting a proof of income. To know more about this, check out our guide on loans.
Different banks have varied processing time frames but most banks take 3 to 7 business days upon receiving your complete requirements. Use our loan comparison tool to get more information on how long it will take to get a loan approval.

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