List of Loan Purposes in the Philippines

Borrowing money is so common that it naturally blends with the Filipino way of life. “Kumusta ka na?” is now something of an automatic—and unpleasant—prelude to “Pautang naman.”

Still, money plays a crucial role in our lives. After all, unexpected events happen. But before applying for a personal loan, make sure your loan purposes are reasonable, practical, necessary, and urgent—this can help you evaluate whether you really need a loan and prevent you from getting into bad debt.

Consult the list of loan purposes below.

How Important is Your Loan Purpose?

Before you submit an application, you should identify your loan purpose. This can help you manage it and make sure the money you borrowed will be used as planned. After all, having all that cash on hand can be very tempting.

For instance, if you’re borrowing money for a home renovation, you should already estimate the total costs, including miscellaneous expenses. Getting a personal loan for a new vehicle? Consider your capacity to pay for daily vehicle maintenance aside from your monthly loan repayments.

This way, you won’t need to take out another loan when you suddenly realize that your loan can't cover all expenses.

List of Loan Purposes: 13 Best Examples

Wondering, "What should I put for 'what is the purpose of the loan'?" Here are some acceptable reasons to avail of a personal loan:

👉 Medical Emergencies

The Bangko Sentral ng Pilipinas’ 2023 Financial Inclusion Survey^[1] found that 45% of Filipino adults have used loans due to sickness in the family.

Ideally, your emergency fund, health insurance, and PhilHealth membership should cover unplanned healthcare expenses, such as hospitalization. However, there are other related costs like medicines and post-surgery treatments to pay for when you get sick.

These urgent expenses can’t wait. Should you find yourself in a tight financial spot during and after a critical illness, a personal loan can help you pay for unexpected expenses.

👉 Debt Consolidation

Through a debt consolidation loan, you can make your finances more manageable. Such a loan rolls all your credit card balances and any other pre-existing debt into one big personal loan.

It’s one of the best purposes for loan application as it allows you to refinance your old loans into one with more affordable terms.

👉 Wedding

Weddings are an expensive affair in the Philippines. It isn’t uncommon for engaged couples to spend anywhere between half a million pesos to more than a million pesos just to get married.

Even a simple and intimate wedding can set you back around ₱100,000 to ₱200,000. It’s still a huge sum of money, especially if you’re funding your wedding without help from your family.

A personal loan can ease the financial burden that comes with wedding preparations—as long as you keep your budget within a reasonable range.

👉 Pregnancy

Becoming a parent soon? Congratulations! You've got a tough but fulfilling journey ahead.

Prepare for expenses such as pre-pregnancy OB-gyne checkups up to ₱5,000; supplements up to ₱4,500; tests up to ₱5,000; and of course, hospitalization for your delivery. Depending on your chosen hospital, normal delivery can cost up to ₱25,000, while caesarean can set you back up to ₱150,000.

👉 Education

Education is an important investment, whether you're pursuing higher studies for career advancement or funding your children’s college education to secure their future.

While education is a basic right in the Philippines, many families cannot afford it. If you want your child to get a top-notch-quality education at a premier university, prepare to spend hundreds of thousands of pesos every year. If you’re planning to send your child to a medical school, prepare as much as ₱300,000^[2] for one semester.

You can save up years ahead of time. But if you’re pressed for time, consider getting a personal loan with a low interest rate and fixed repayment term.

👉 Moving Costs

Starting a family and moving out to start life anew at your own place? Or did you perhaps land an exciting new job in another city? Fund your moving costs with a personal loan.

Moving costs may include vehicle rental at a minimum of ₱10,000, depending on the cargo space you need and your destination’s distance from Metro Manila. You may also need to allot a budget for a helper, which may cost around ₱1,500.

👉 Home Repair or Improvement

Unfortunately, Filipino households are no strangers to floods, fires, and other calamities—nor to the sudden expenses that come after, like house repairs.

You may also need to expand your space at home for your growing family, install security features for your loved ones' safety, or fix issues like a leaky roof.

For your home improvement or repair needs, a low-interest personal loan can help.

🛍️ Fund Big Purchases, Celebrations, and Milestones with a UnionBank Personal Loan!

Buying gadgets, tools, and equipment for work or business? Gearing up for life milestones such as a wedding or a baby? Looking for ways to fund your child's tuition fees? If you want both convenience and high loan amounts, check out what UnionBank has to offer. With a UnionBank Personal Loan, you can borrow funds up to ₱2 million and have your loan disbursed in as fast as 24 hours!

👉 Home Office Setup

While some companies are now back in the office, others continue to adopt a remote work setup. After all, work-from-home arrangements provide convenience to a lot of Filipino workers.

Thinking of leveling up your home office? You'll need to fund a new laptop or computer purchase, preferably with at least a 4GB RAM processor. You may also need to buy a roomier work table or invest in a postpaid internet connection of at least 10Mbps.

When deciding on the loan amount, consider also the quantity and quality of the gadgets that can facilitate an efficient and organized home office setup.

👉 Appliances

Buying the latest iPhone model when your current phone is still working isn’t one of the best answers to loan purpose. Rather, this applies to appliances and gadgets you can't do without, such as a refrigerator or a stove.

Even better if you plan to use these items to earn more money, like heavy-duty washing machines for your laundry business or a new laptop for your freelancing gig.

👉 Vehicle Purchase

In a country where transportation is a daily dilemma, plenty of Filipinos opt to get a car for convenience and comfort.

To finance your car purchase, get a loan. Instead of shelling out a million pesos or more upfront, just pay 20% to 50% of the total price, drive home your new vehicle, and pay for it in affordable monthly installments.

👉 Unpaid Utility Bills

Found yourself in a tight spot with a pile of unpaid bills? Don't panic if your funds fall short this time around.

You can borrow money to keep your accounts up-to-date. Sometimes it’s just not practical to sacrifice your family’s comfort, especially when you need electricity for work and school. But do try not to make a habit of it, as your debt can snowball.

👉 Travel

While traveling seems like a luxury, it’s worth spending on because of its many benefits—you get to experience different cultures, expand your network, develop new skills, and strengthen your bond with family and friends.

Ideally, you should save up for travel expenses. But if a great travel opportunity—perhaps a business-related one—comes along and you need money right away, use a personal loan to avoid missing out.

👉 Funeral Expenses

If you lose a loved one unexpectedly, you need cash to pay for funeral and burial expenses. A casket can cost anywhere from ₱40,000 to ₱100,000, while a memorial chapel rental can cost up to ₱15,000 per night.

Nobody likes talking about death, which could be the reason a lot of Filipinos don’t save up for their death expenses. More often than not, the loved ones left behind end up availing of a personal loan when a death in the family happens.

⚡Get Approved for a Personal Loan within minutes with Finbro!

Finbro

Get up to ₱15,000 on your first loan and up to ₱50,000 on succeeding loans with Finbro! Use your Finbro loan for emergencies and unexpected events. You can also fund home repairs, vacations, or gadget upgrades.
Apply now via Moneymax to get started on your quick loan!

Loanable amount: ₱1,000 to ₱15,000
- ₱1,000 to ₱15,000 on your first loan
- Up to ₱50,000 on succeeding loans
Monthly add-on interest rate: 0% to 0.2% daily or 6% monthly
Loan tenure: 12 months
Processing fees: Cap of 15% monthly
Processing time: Between 10 minutes to 1 business day

Final Thoughts

We hope the list of loan purposes above helped you choose a productive use of a personal loan. After all, a loan can help you achieve your goals and stay on top of your finances. Just make sure to compare your options and read the fine print so you can effectively plan your repayments.

Compare some of the best options from reputable lenders in the country and apply via Moneymax:

Provider	Loan Amount	Monthly Add-on Rate	Loan Term	Minimum Annual Income	Approval Time
UnionBank Personal Loan	Up to ₱2 million	26.9% per annum	12 to 60 months	₱250,000	As fast as 5 minutes
UNO Digital Bank Personal Loan	₱10,000 to ₱500,000	1.79% per month (corresponds to annual contractual rates or annual percentage rates ranging from 35.78% to 37.54%)	Six to 36 months	₱240,000	Five to seven banking days
Metrobank Personal Loan	₱20,000 to ₱2 million	1.25% to 1.75%	36 months	₱350,000	Seven banking days
BPI Personal Loan	₱20,000 to ₱3 million	Maximum annual contractual rate of 28.67%	12 to 36 months	Inquire with BPI	Five to seven banking days
Tonik Credit Builder	₱5,000 to ₱20,000	4.84%	Six to 12 months	Inquire with Tonik	Two banking days
Tala	₱1,000 to ₱25,000	0.43% daily	Up to 61 days	None	Five minutes to 24 hours
HSBC Personal Loan	₱30,000 to ₱500,000	0.65%	Six to 36 months	₱168,000	Five to seven banking days
CIMB Personal Loan	₱30,000 to ₱1 million	As low as 0.83%	12 to 60 months	₱180,000	One to two banking days
Maybank Personal Loan	Up to ₱1 million	1.3%	Up to 36 months	₱300,000	Inquire with Maybank
RCBC Bank Personal Loan	₱50,000 to ₱1 million	1.3%	Six to 36 months	₱360,000	5 to 7 banking days
PSBank Personal Loan	₱20,000 to ₱250,000	42.88% Effective Interest Rate per annum for a 24-month term (term loan) 41.29% Effective Interest Rate per annum for a 36-month term (Term Loan) 34.49% Effective Interest Rate per annum for 12 months (Revolving Loan	24 or 36 months	₱180,000	Five to nine banking days