When you take out a personal loan with a low interest rate in the Philippines, you can hit two birds with one stone. Not only can it fund whatever it is you need to buy or pay for, but you can pay off the loan in affordable monthly payments as well.
Most borrowers in the Philippines take the interest rate into account when applying for a loan. According to the latest Bangko Sentral ng Pilipinas (BSP) financial inclusion survey, the interest rate is one of the top considerations for Filipino borrowers.[1] This is why many Filipinos go for low-interest personal loans.
The best personal loans with low interest rates in the Philippines are usually from government agencies and banks. Getting low interest personal loans helps you save money, as it keeps the interest payments low over the loan's duration.
Monthly Add-On vs Effective Interest Rate: What is the Difference?
First things first: Let's clarify the differences between the two types of interest rates on personal loans in the Philippines. Lenders typically advertise two types: the monthly add-on and effective interest rates.
The effective interest rate, also called the annual percentage rate (APR), 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 in a more expensive monthly amortization cost for the borrower. When checking for different types of personal loans, try searching for a lower monthly add-on interest rate.
What are the Banks with the Lowest Interest Rates for Personal Loans in the Philippines?
Wondering which bank offers the best option for a personal loan? We've listed down some of the lowest interest rates for personal loans in the Philippines—not just from banks, but also from government agencies. Choose the best personal loan that fits your needs and budget.
1. SSS Salary Loan
- Effective interest rate: 10% per annum (based on diminishing principal balance)
- Loan amounts:
- One-month salary loan - For member-borrowers who have at least 36 months of total contributions and six months of contributions in the last 12 months
- Two-month salary loan - For member-borrowers who have at least 72 months of total contributions and six months of contributions in the last 12 months
- Loan terms: Up to 24 months
- Processing time: In as fast as 60 seconds[2]
- Loan fees:
- Service fee: 1% of the total loan amount
- Late payment penalty of 1%
The SSS Salary Loan is a government loan with a fixed low interest rate of 10% per year, meaning 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.
2. Pag-IBIG Multi-Purpose Loan
- Effective interest rate: 10.5% per annum
- Loan amount: Up to 80% of the borrower's regular Pag-IBIG savings
- Loan terms: 24 to 36 months
- Processing time: As fast as two days
Another popular low-interest personal loan in the Philippines is the Pag-IBIG Multi-Purpose Loan. Sharing many similarities with the SSS Salary Loan, the Pag-IBIG loan offers a low fixed rate of 10.5% and allows monthly repayment through payroll deduction. The loan is payable in 24 to 36 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. HSBC Personal Loan
- Monthly add-on interest rate: As low as 0.65%
- Effective interest rate: 14.29% for 24 months
- Loan amount: ₱30,000 to ₱500,000
- Loan terms: Six to 36 months
- Processing time: Up to five working days
- Loan fees:
- Processing fee: ₱1,500
- Late payment fee: 36% per annum on overdue payment
- Documentary Stamp Tax: 0.75% of the drawn loan amount (deducted from loan proceeds; applies to the loan amount of at least ₱250,000 or for business purposes)
Wondering which bank has the lowest interest rate on a personal loan? HSBC's cash loans with low interest rates are a good option. Use it to fund your travel or education. Read our HSBC Personal Loan guide before you apply.
4. CIMB Bank Personal Loan
- Monthly add-on interest rate: 1.12% to 1.95%
- Annual contractual rate: 24%, 30%, or 36%
- Loan amount: ₱30,000 to ₱1 million
- Loan terms: 12 to 60 months
- Processing time: Loan application in just 10 minutes, approval in 24 hours, and disbursement in one to two banking days
- Loan fees:
- Documentary Stamp Tax: ₱1.50 per ₱200 of the loan amount
- Late payment fee: 5% of the unpaid installment due or ₱300, whichever is higher
CIMB offers one of the lowest personal loan interest rates in the Philippines. And if you do everything on your phone, you'll be glad to know that CIMB offers an all-digital personal loan application. Just launch your CIMB app, tap I need a personal loan and Apply now.
Supply the required information, upload all your requirements, and finish the Virtual Verification process. If approved, you'll receive an email with the contract of your legit online loan with low interest.
5. BPI Personal Loan
- Monthly add-on interest rate: 1.2%
- Annual contractual rate: 25.60%
- Loan amount: ₱20,000 to ₱2 million
- Loan terms: 12 to 36 months
- Processing time: Five to seven working days
- Loan fees:
- Processing fee: ₱1,500 (one-time; deducted from loan proceeds)
- Documentary stamp tax: ₱1.50 per ₱200 of the loan amount (for BPI personal loans above ₱250,000 or for business purposes)
BPI is also one of the banks with the lowest interest rates. It has an affordable option for Filipinos who need to borrow money through its low-interest personal loan with an annual contractual rate of 25.60%. The loan amount for BPI personal loan ranges from ₱20,000 to ₱2 million payable in 12, 18, 24, 30, or 36 months.
6. Metrobank Personal Loan
- Monthly add-on interest rate: 1.25% to 1.75%
- Annual contractual rate: 25.976% to 36.742%
- Loan amount: ₱20,000 to ₱1 million
- Loan terms: 12 to 36 months
- Processing time: Seven working days
- Loan fees:
- Disbursement fee: ₱1,500
- Late payment fee: ₱850 per incidence
- Pre-termination fee: 5% of the outstanding balance or ₱550, whichever is higher
Borrow up to ₱1 million and enjoy rates as low as 1.25% with the Metrobank Personal Loan. Just prepare a signed promissory note and disclosure statement and a valid government ID, fill out the online application form, and wait for a call regarding your application. Metrobank processes loans in as fast as seven business days.
7. UnionBank Personal Loan
- Monthly add-on interest rate: 1.29%
- Annual contractual rate: 26.9%
- Loan amount: Up to ₱2 million
- Loan terms: 12 to 60 months
- Processing time: As fast as 24 hours
- Loan fees:
- Disbursement fee: ₱1,750 including stamp duty
- Closure handling fee: 4% of the unbilled principal component of the loan that is prepaid
- Late payment fee: ₱500 or 6% of the overdue amount, whichever is higher
But what many people don't know is that the UnionBank Personal Loan has low-interest rates.
Get the lowest personal loan rates with UnionBank and have it approved within 24 hours. It has the longest repayment term—up to five years—in the Philippines. You can borrow up to ₱2 million and repay it in 12, 24, 36, 48, or 60 months.
8. RCBC Personal Loan
- Monthly add-on interest rate: 1.3%
- Loan amount: ₱50,000 to ₱1 million
- Loan terms: Six to 36 months
- Processing time: Seven to 21 days
Another loan with the lowest interest rate is from RCBC. It allows you to borrow up to ₱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.
9. Maybank Personal Loan
- Monthly add-on interest rate: 1.3%
- Loan amount: ₱50,000 to ₱1 million
- Loan terms: 12 to 36 months
- Processing time: Five to 10 working days
- Loan fees:
- Processing fee: ₱2,000 to ₱3,000
- Documentary stamp of ₱1.50 for every ₱200 if the loan amount is over ₱250,000
- Credit Life Insurance (amount depends on age and loan maturity)
One of the best low interest personal loans in the Philippines is the Maybank Personal Loan, which offers a 1.3% fixed interest rate. You can also borrow up to ₱1 million, depending on your salary and bank approval.
10. CTBC Bank Personal Loan
- Monthly add-on interest rate: 1.39% to 1.79% across all loan terms
- Effective interest rates: 29.33% to 37.54% depending on the term of the loan
- Loan amount: ₱20,000 to ₱1 million
- Loan terms: 12 to 36 months
Also called Salary Stretch Loan (for individuals), CTBC Bank's personal loan is a multi-purpose loan that salaried employees and self-employed people can avail of for home improvement, education, balance transfer, business, travel, and more. Its interest rates are also among the lowest in the market, starting at only 1.39% for the monthly add-on rate and 29.48% for the effective interest rate.
11. PSBank Flexi Personal Loan
- Monthly add-on interest rate: 1.75% for Term Loan; 2.5% monthly interest rate for Revolving Loan
- Effective interest rate:
- 42.88% for 24 months (Term Loan)
- 41.29% for 36 months (Term Loan)
- 34.49% for 12 months (Revolving Loan)
- Loan amount: ₱20,000 to ₱250,000
- Loan terms: 24 or 36 months (for fixed-term loans)
- Processing time: Five to nine working days
- Loan fees:
- Handling fee: ₱1,500 or 1% of the approved credit line, whichever is higher
- Credit line renewal fee: ₱1,500
- Collection fee: 15% to 35% of the total outstanding amount in case of default (depending on delinquency age)
If you're shopping for lower interest loans, check out our article about PSBank Flexi Personal loan for more details. It’s collateral-free, and it’s the only personal loan with a revolving credit line and fixed term. You get an ATM card as well.
On top of that, you also receive rebates under their loan rebate program when you make advance or excess loan payments.
12. SB Finance Personal Loan
- Monthly add-on interest rate: 1.89%
- Annual percentage rate: Starts at 37.53%
- Loan amount: ₱30,000 to ₱2 million
- Loan terms: 12 to 36 months
- Processing time: Within five banking days
- Loan fees:
- Processing fee: ₱2,000
- Notarial fee: ₱300 (for ₱100,000 loan amount and up)
- Pre-termination processing fee: ₱2,000
- Late payment fee: 3% of unpaid amortization
One of the low-interest personal loans in the Philippines is the one from SB Finance, a subsidiary of Security Bank. Loan amounts range from ₱30,000 to ₱2 million, payable in 12, 18, 24, or 36 months. Easily apply online through its website and get your loan approved within a week.
13. PBCom Puhunan Plus
- Interest rate: 2% to 10.5%
- Loan amount: ₱10,000 to ₱150,000
- Loan terms: 14, 28, or 84 days
- Processing time: One to two working days
- Loan fees:
- Late payment fee: Up to 5% of the principal amount
- Service fee: 2% to 10.5%
This cash loan is exclusive to Puregold Tindahan ni Aling Puring members. Members simply need to text their name and address to 0922 110 1030. A PBCOM Account Officer will then get in touch for the next steps. Loans are processed in one to two days only.
14. Tonik Flex Loan
- Monthly add-on interest rate: As low as 1.7%
- Loan amount: ₱20,000 to ₱250,000
- Loan terms: 6 to 24 months
- Processing time: One working day
Aside from being one of the lowest in the market, the Tonik Flex Loan's interest rate is also fixed, meaning your monthly payment amount remains the same throughout the term. Since you know how much you'll be paying every time, you can easily manage your budget.
15. CBS Easi-Funds Personal Loan
- Monthly interest rate: 2.73% to 2.92%
- Loan amount: ₱30,000 to ₱1 million
- Loan terms: 12 to 36 months
- Processing time: Three to five working days
The CBS Easi-Funds Personal Loan interest rates vary depending on your loan term. Use this cash loan, whose amount can range up to ₱1 million, to fund any emergency expenses, home renovations, debt consolidation, and more.
At a Glance: 15 Personal Loans with Low Interest Rates in the Philippines
For your easy and quick reference, here's a summary table of low-interest personal loans.
How Will I Get Approved for a Low-Interest Loan?
So you've found a personal loan in the Philippines with the lowest interest rate. But will your loan get approved?
Just because a lender offers a personal loan with a low interest rate in the Philippines doesn't mean everyone can actually qualify for it. This is especially true for banks, which 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 get a high-interest rate, or worse, get rejected.
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, make sure to improve it before you apply for a personal loan.
How to Get a Personal Loan with a Low Interest Rate in the Philippines
A personal loan with a low interest rate is useful for funding any emergency expenses or projects. 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 a personal loan at a low interest rate:
Step 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 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 monthly. Make sure you can afford this amount and that it won’t strain your budget.
Step 2: Compare Loan Products
If you want to get the lowest loan interest rate in the Philippines, 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 through banks, government agencies, and other lending institutions. The choice is up to you.
Consider the following factors when choosing where to loan money:
- Loan amount
- Loan term
- Monthly interest rate
- Loan fees
- Requirements
Step 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 from the stress and hassle of going back and forth to the lender’s office just to submit all your documents.
Step 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.
Step 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 personal loan in the Philippines. Again, get your documents in order and make sure you're eligible for the loan.
Don't forget to set up 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 debts. This 30% rule is considered a good debt-to-income ratio.[3]
Final Thoughts
While banks and government agencies are known for their strict personal loan requirements, these lenders still cater to everyone's financial needs by offering personal loans with low interest rates in the Philippines.
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.
Sources:
- [1] 2021 BSP Financial Inclusion Survey
- [2] SSS promises salary loan approval in ’60 seconds + 5 clicks’ (Manila Bulletin, 2022)
- [3] What Constitutes a Good Debt-to-Income (DTI) Ratio? (Investopedia, 2022)
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