Published: January 6, 2021 | Updated: April 24, 2021 | Posted by: Venus Zoleta | Personal Loan
You can hit two birds with one stone when you take out a personal loan in the Philippines with low interest rate . Not only can it fund whatever it is you need to buy or pay for, you can pay off the loan in affordable monthly payments as well.
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. This is the main reason why many Filipinos go for a low-interest personal loan.
The best personal loans in the Philippines are 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.
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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:
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.
If you want to get the lowest interest personal loan, 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 personal loan interest rate in the Philippines through banks, government agencies, and other lending institutions. It’s still up to you where you would like to get it.
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.
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.
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.
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.
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.
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.
Get the lowest personal loan rates with Citibank and have it approved within 24 hours. It has 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 about Citi Personal Loan:
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.
BPI also offers one of the lowest personal loan interest rates in the Philippines. It has 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.
Here is the Easy Guide to Applying for a BPI Personal Loan
|Loan Term (in months)||Monthly Add-on Rate||Effective Interest Rate|
Bank loan interest rates in the Philippines like what HSBC offers is also a good option. You can use this to fund your travel or education. The loan can also be used to pay off your credit card debt.
EastWest Bank is another bank with the lowest interest rate on personal loan products at 1.89% monthly. You can borrow up to PHP 2 million to finance your travel, emergency, and educational expenses.
Another loan with the lowest interest rate is from RCBC. It 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.
One of the best low interest loans in the Philippines is Maybank’s Enable Personal Loan, which offers a 1.5% fixed interest rate. You can also borrow up to PHP 1 million, depending on your salary and bank approval.
If you’re shopping for lower interest loans, check out PSBank Flexi Personal loan. 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.
CIMB also offers competitive bank loan interest rates in the Philippines. And if you do everything on your phone, you will 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 and upload all your requirements. There will be Virtual Verification process. If approved, you will receive an email with the loan contract.
Below is a list of trusted personal loan in the Philippines and their loan features. Compare your options and apply through Moneymax!
|Personal Loan Provider||Features|
|Citibank Personal Loan|
|EasyRFC Multi-Purpose Loan|
|SB Finance Personal Loan|
|TALA Personal 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 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.
Read more related loan articles:
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.
Venus is the Head of Content at Moneymax, with 15+ years of experience in digital marketing, corporate communications, PR, and journalism. She invests in stocks, mutual funds, VUL, and Pag-IBIG MP2. Outside of work, she’s crazy about cats and Korean dramas. Follow Venus on LinkedIn.