How to Get a Low Interest Personal Loan in the Philippines

Published: October 7, 2020 | Updated: October 14, 2020 | Posted by: Moneymax | Personal Loan


Low Interest Personal Loan Philippines | Moneymax

Like you, majority of borrowers in the Philippines take the interest rate into account when applying for a loan. According to the Bangko Sentral ng Pilipinas financial inclusion survey, the interest rate is one of the top considerations for 47% of Filipino borrowers[1]. This is the main reason why many Filipinos go for a low-interest personal loan.

The best personal loans in the Philippines are those with low interest rates, usually from government agencies and banks. Getting a personal loan with low-interest rate helps you save money, as it keeps the interest payments low over the loan’s duration.

Lenders typically advertise two types of interest rates: the monthly add-on and effective interest rate. Also called the annual percentage rate, the effective interest rate reflects the true interest you’re paying on a loan.

On the other hand, the monthly add-on interest rate is calculated by combining the amount of the loan and the annual interest rate, then multiplied by the number of years you hope to repay the loan. This results to a more expensive monthly amortization cost for the borrower. Thus, when checking for different types of personal loans, try searching for a lower monthly add-on interest rate.

How to Get a Low Interest Personal Loan

low interest personal loan - how to get lowest interest personal loan philippines

A personal loan with a low interest rate is helpful to fund any emergency expenses or projects you have. It can also help you consolidate your debt or fund your child’s education. However, do your research and thoroughly evaluate your own finances before getting one.

Here are a few steps to consider when getting the low-interest personal loan for your needs:

1. Crunch the numbers

The last thing you or any lender want is for you to take out a loan you can’t afford. It’s is just a disaster in the making. However, you can avoid this by determining how much cash you need after loan charges are deducted.

Then, figure out how much you need to pay for the monthly payments. Make sure you can afford this amount, and that it won’t strain your budget.

2. Compare loan products

Don’t settle for the first offer you see. Check every nook and cranny of the internet to find the best deals in the market. You can get the lowest interest personal loan in the Philippines through banks, government agencies, and other lending institutions. It’s still up to you where you would like to get it.

Consider the following factors when comparing low interest loans:

  • Loan amount
  • Loan term
  • Monthly interest rate
  • Loan fees
  • Requirements

3. Prepare the requirements

Once you’ve narrowed down your choices, check the bank or financial institution’s loan requirements. Some lenders require a minimum annual income to qualify for a personal loan. You may also have to fulfill document requirements proving your identity and source of income.

Then, get your documents in order. This will fast-track your loan application and save you the stress and hassle of going back and forth to the lender’s office just to submit all your documents.

4. Read the fine print

Make sure to read the terms and conditions of the personal loan. This piece of paper will give you important information about your personal loan, which can save you thousands of pesos in the long run. If you have any other concerns, ask your lender about it.

5. Apply for the loan and get ready for repayments

After choosing the best deal for your needs, it’s now time to apply for a low-interest personal loan. Again, get your documents in order and make sure you are eligible for the loan.

It’s also ideal to set a payment scheme for your loan. Adjust your budget to accommodate your monthly payment and ensure you’re not spending more than 30% of your monthly income just to cover any debts you have. This 30% rule is considered a good debt-to-income ratio[2].

Read more: Smart Tips to Improve Your Personal Loan Application

Where Can I Get a Personal Loan with Low Interest Rate?

We listed down some of the lowest interest personal loans in the Philippines to help you choose the best deal that fits your needs and finances.

1. SSS Salary Loan

low interest personal loan - sss salary loan

  • Effective Interest Rate: 10%
  • Loan amount: Up to PHP 30,000
  • Loan terms: Up to 24 months
  • Processing duration: Two to three weeks
  • Loan fees:
    • Service fee of 1% of the total loan amount
    • Late payment penalty of 1%

The SSS salary loan is a government loan with a low-interest rate of 10% per year, meaning that the monthly payments will not fluctuate monthly. Qualified SSS members can borrow one month’s or two months’ worth of their monthly salary credit and repay the loan in 24 monthly installments.

Loan repayment is also convenient for employed borrowers, as their monthly amortization is automatically deducted from their salary. No wonder it’s the Filipinos’ top-of-mind choice for their short-term cash needs.

Another great feature of this low-interest personal loan is the Loan Restructuring Program (LRP). The LRP makes it easy for delinquent borrowers to settle their overdue SSS loans at a lower annual interest rate of 3% without having to pay the penalty fee. Also, the repayment term is flexible up to five years.

2. Pag-IBIG Multi-Purpose Loan

low interest personal loan - pagibig salary loan

  • Effective Interest Rate: 10.75%
  • Loan amount: Up to 80% of your regular Pag-IBIG savings
  • Loan terms: Up to 24 months
  • Processing duration: Two to three weeks

Another popular low-interest personal loan in the Philippines is the Pag-IBIG Multi-Purpose Loan. Sharing many similarities with the SSS salary, the Pag-IBIG loan offers a low fixed rate of 10.75% and allows monthly repayment through payroll deduction. The loan is payable in 24 monthly installments.

Qualified Pag-IBIG members can borrow 80% of their total accumulated value (TAV). The TAV is a sum of all monthly Pag-IBIG contributions, employers’ share of contributions, and the total dividends earned.

3. Citibank Personal Loan

  • Monthly Add-On Interest Rate: 1.26%
  • Loan amount: PHP 20,000 to PHP 2 million
  • Loan terms: 12 to 60 months
  • Processing duration: As fast as 24 hours
  • Loan fees:
    • Processing fee of PHP 1,750 including stamp duty
    • Early repayment charge of 4% of the unbilled principal
    • Late payment fee of PHP 500 or 6% of outstanding balance, whichever is higher

low interest personal loan - citi personal loan

Citibank is known for approving a loan within 24 hours and having the longest repayment term—up to five years—in the Philippines. But what many people don’t know is that their Citi Personal Loan has low-interest rates.  You can borrow any amount from PHP 20,000 to PHP 2 million and repay it in 12, 24, 36, 48, or 60 months.

Read more: A Handy Guide to Getting a Citi Personal Loan

4. Security Bank Personal Loan

  • Monthly Add-On Interest Rate: 1.39% to 1.89%
  • Loan amount: PHP 30,000 to PHP 2 million
  • Loan terms: 12 to 36 months
  • Processing duration: Within five working days
  • Loan fees:
    • Processing fee of PHP 2,000 plus stamp duty
    • Early repayment penalty of PHP 2,500
    • Late loan repayment charge of PHP 500 or 3% of amount due, whichever is higher

One of the low-interest personal loans in the Philippines is the one from Security Bank. Loan amounts range from PHP 30,000 to PHP 2 million, payable in 12, 18, 24, or 36 months. The annual interest rate starts at 29.48%. Easily apply online through their website and get your loan approved within a week.

Read more: 7 Reasons a Security Bank Personal Loan Makes a Practical Choice

5. BPI Personal Loan

  • Monthly Add-On Interest Rate: 1.20%
  • Loan amount: PHP 20,000 to PHP 1 million
  • Loan terms: 12 to 36 months
  • Processing duration: Eight to 13 working days

BPI provides an affordable option for Filipinos who need to borrow money through its low-interest personal loan starting at 25.03% annually. You can borrow an amount that’s up to thrice your gross monthly income. The loan amount for BPI personal loan ranges from PHP 20,000 to PHP 1 million payable in 12, 18, 24, 30, or 36 months.

Loan Term (in months)Monthly Add-on RateEffective Interest Rate
121.20%25.60%
181.20%25.74%
241.20%25.59%
301.20%25.33%
361.20%25.03%

6. BDO Personal Loan

  • Monthly Add-On Interest Rate: 1.25% to 1.30%
  • Loan amount: PHP 10,000 to PHP 3 million
  • Loan terms: Six to 36 months
  • Processing duration: Seven to ten banking days
  • Loan fees:
    • Processing fee of PHP 1,300
    • Late payment fee of PHP 300 or 5% of the outstanding balance, whichever is higher

For Filipinos and foreigners living in the Philippines, BDO is one of the best banks for a personal loan with a low-interest rate starting at 25.98% annually. Loan amounts range from PHP 10,000 to PHP 1 million payable in six, 12, 18, 24, or 36 months.

Loan Term (in months)Monthly Add-on RateEffective Interest Rate
61.30%26.27%
121.25%26.63%
181.25%26.76%
241.25%26.58%
361.25%25.98%

7. HSBC Personal Loan

  • Monthly Add-On Interest Rate: 1.21%
  • Loan amount: PHP 30,000 to PHP 500,000
  • Loan terms: Six to 36 months
  • Processing duration: Up to five working days
  • Loan fees:
    • Processing fee of PHP 1,500
    • Late payment fee of 3% per annum or at least PHP 300

Apart from credit cards, HSBC also offer a low interest personal loan in the Philippines. You can use this to fund your travel or education. The loan can also be used to pay off your credit card debt.

8. EastWest Personal Loan

  • Monthly Add-On Interest Rate: 1.89%
  • Loan amount: PHP 25,000 to PHP 2 million
  • Loan terms: 12 to 36 months
  • Processing duration: Five to seven working days
  • Loan fees:
    • Processing fee of PHP 1,900
    • Stamp duty of PHP 1.00 for every PHP 200 if loan amount is over PHP 250,000
    • Late payment fee of PHP 500 or 8% per month of outstanding balance, whichever is higher

EastWest Bank’s personal loan products offer an interest rate of 1.89% monthly. You can borrow up to PHP 2 million to finance your travel, emergency, and educational expenses.

9. RCBC MyCash Personal Loan

  • Monthly Add-On Interest Rate: 1.3%
  • Loan amount: PHP 50,000 to PHP 1 million
  • Loan terms: Six to 36 months
  • Processing duration: Seven to 21 days
  • Loan fees:
    • Processing fee of PHP 1,500 or 1% of the loan amount, whichever is higher
    • Late payment fee of 5% per annum on any outstanding balance

This low interest personal loan from RCBC allows you to borrow up to PHP 1 million with flexible terms of up to 36 months. The monthly add-on interest rate is 1.3%, and approval may take up to 21 days.

10. Maybank Enable Personal Loan

  • Monthly Add-On Interest Rate: 1.5%
  • Loan amount: PHP 50,000 to PHP 1 million
  • Loan terms: 12 to 36 months
  • Processing duration: Five to 10 working days
  • Loan fees:
    • Processing fee of PHP 2,000 to PHP 3,000
    • Documentary stamp of PHP 1.50 for every PHP 200 if loan amount is over PHP 250,000
    • Credit Life Insurance (amount depends on age and loan maturity)

One of the best low interest loans in the market, Maybank’s Enable Personal Loan offers a 1.5% fixed interest rate. You can also borrow up to PHP 1 million, depending on your salary and bank approval.

Will I Get Approved for a Loan with a Low Interest Rate?

low interest personal loan - how to get lowest interest personal loan philippines

Just because a lender offers a personal loan with low interest doesn’t mean everyone can actually qualify for it. This is true especially for banks that conduct credit checks to evaluate a borrower’s ability to repay a loan. They look specifically at a loan applicant’s credit score.

You have a great chance of getting a low-interest personal loan if your credit score is high. But if it’s low, you might be approved with a high-interest rate or worse, get rejected for a personal loan.

That’s why it’s very important to check your credit score. If you know yours is good, you can negotiate with the bank for a lower interest rate. On the other hand, if your score is bad, you’ll have the opportunity to improve it before you apply for a personal loan.

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Final Thoughts

While banks and government agencies are known for their strict loan requirements, these lenders still cater to everyone’s financial needs with their personal loans with low-interest offerings. As long as you practice financial discipline and maintain a good credit history, you can easily qualify for low-interest rates and eventually, save money on interest payments.

Compare Other Loan Options

Below is a list of trusted personal loan in the Philippines and their loan features. Compare your options and apply through Moneymax!

Personal Loan ProviderFeatures
Citibank Personal Loan
Get a Citibank Personal Loan with Moneymax
  • Fast approval time in as fast as 24 hours
  • Loan amount of up to P2 million
  • Flexible payment terms of up to five (5) years
EasyRFC Multi-Purpose Loan
Get EasyRFC Multi-Purpose Loan with Moneymax
  • Fast approval time in as fast as 24 hours
  • High loan amount of up to P150,000
  • Payment term of up to 12 months
SB Finance Personal Loan
Get SB Finance Personal Loan with Moneymax
  • Get approved within five banking days
  • High loan amount of up to P2 million
  • Flexible payment terms of up to 36 months
TALA Personal Loan
Get TALA Personal Loan with Moneymax
  • Fast approval time in as fast as 24 hours
  • Quick cash loan up to P15,000
  • 24/7 application using an Android phone

Sources:

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