List of Top Personal Loan Purposes in the Philippines

Published: August 12, 2021 | Updated: September 14, 2021 | Posted by: Venus Zoleta | Personal Loan


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Borrowing money is so common that it naturally blends with the Filipino way of life. Whenever you have a financial goal to fulfill, your first option is to apply for a loan or take the undying lifeline of calling a friend. Which is why “Kumusta ka na?” has somewhat become an automatic prelude to  “Pautang naman,” with the person receiving the message being torn between lending you money and simply ignoring your message. 

The act of borrowing money has earned a bad reputation among Filipinos that it’s often the last option of people who really need money. The lack of good loan purposes, which lead to unpleasant utang habits, also doesn’t help. 

But money plays a crucial role in our lives. Unexpected events, such as hospitalization, can result in paying an amount that you probably don’t have. So before applying for a loan, make sure your loan purposes are reasonable, practical, necessary, and urgent to prevent you from getting into bad debts. 

Here are some of the best reasons to get a personal loan that can positively impact your family and your well-being.

How Important are Loan Purposes?

Before getting a personal loan, your loan purposes should be clear. The purpose of your loan is important in managing it and making sure that the money you borrowed will be used as planned. After all, having all that cash on hand can be very tempting and might lure you to spend on unnecessary things. 

If you’re borrowing money for a home renovation, then you should already have estimated the total costs, including miscellaneous expenses. If you’re getting a personal loan for a new vehicle, also 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 is not enough to cover all expenses.

List of Loan Purposes: 17 Best Reasons for Loan Application

1. Education

loan purposes - education

Education is an important investment, whether it’s pursuing higher studies for your 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 topnotch-quality education at a premier university, be prepared to spend more than a hundred thousand pesos every year. And if you’re planning to send your child to a medical school, prepare as much as PHP 300,000[1] for one semester. 

Saving up for your child’s college tuition fund is something you can do many years ahead. But if you’re pressed for time to pay for tuition this year, consider getting a personal loan for education purposes with a low interest rate and fixed repayment term.  

2. Medical Emergencies

Your emergency fund, health insurance, and PhilHealth membership should cover unplanned healthcare expenses like hospitalization. But then there are other related costs like medicines and post-surgery treatments you have to pay for when you get sick. If you’re an expecting parent, the costs of maternity care can also drain your budget.

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

3. Appliances / Electronic Gadget

loan purposes - appliances and electronic gadgets

Buying the latest iPhone model when your current phone is still working isn’t one of the best reasons to get a personal loan. Rather, appliances and gadgets you’ll use to earn more money (like heavy-duty washing machines for your laundry business or a new laptop for your freelancing gig) are purchases that make getting a personal loan a smart choice.

4. Home Improvement / Repair

Sudden expenses like house repairs are common among Filipino households after going through a flood, fire, or any disaster. You may also need to expand your space at home for your growing family, build a gate or install security features for safety, or fix issues like a leaky roof.

For your home improvement or repair needs, a low-interest personal loan can help you meet and afford them.

5. Business

loan purposes - business

Starting or growing a business is one of the popular and best reasons to get a personal loan in the Philippines. The Bangko Sentral ng Pilipinas’ 2019 financial inclusion survey[2] found that 27% of Filipino adults with outstanding loans used them for business, which is the second most common personal loan purpose in the Philippines.

You can’t wait forever to save enough capital to set up a business, so borrowing money from a bank or government office is your best bet. Being able to borrow money to cover your startup costs is an advantage you can enjoy from a business loan.

6. Travel / Vacation

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

Ideally, you should save for your travel expenses. But if a great travel opportunity comes along and you need money right away, a personal loan can help you avoid missing that out.

apply for a personal loan via moneymax

7. Vehicle Purchase

Getting an auto loan is a popular way to finance a car purchase in the Philippines. Instead of paying a million pesos (or more) upfront, you just pay 20% to 50% of the total price, drive home your new vehicle, and pay for it in affordable monthly installments.

8. Wedding

loan purposes - 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 if you go for a simple and intimate wedding, it can set you back around PHP 100,000 to PHP 200,000. It’s still a huge sum of money, especially if you’re funding your wedding without help from anyone.

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

9. Emergency Fund

Loss of income due to unemployment, illness, or calamity can pull your finances down—but not if you have an emergency fund. However, it does take a while to build your emergency fund, as it has to be equal to six months to a year’s worth of your living expenses. To adequately prepare for sudden expenses, it makes sense to get a low-interest personal loan.

10. Balance Transfer / Debt Consolidation

You can use a personal loan to pay off your other outstanding loans. Through a debt consolidation loan, you can make your finances more manageable by rolling all your credit card balances and any other pre-existing debt into one big personal loan. It’s one of the best loan purposes as it allows you to refinance your old loans into one with more affordable terms.

11. Settling Unpaid Utility Bills

With the pandemic continuously restricting movement and limiting earning opportunities, Meralco and other utility providers have deferred payments and implemented a no disconnection policy[3] for those residing in areas under the enhanced community quarantine (ECQ) and modified ECQ (MECQ).

The relief may not be enough, though, because you’ll still need to settle all your unpaid bills as soon as the community quarantine is over. Borrowing money to keep your accounts up-to-date is one of the reasons to get a personal loan. Sometimes it’s more practical than sacrificing your family’s comfort, especially when you need electricity for work and online learning.

12. Moving Costs

Last year, the government had plans of decongesting Manila as a measure to contain the spread of COVID-19. In July 2021, around eight families went back to Camarines Norte through the Balik Probinsya Bagong Pag-asa Program (BP2).[4] The program also sent families from Metro Manila back to Isabela, Davao del Norte, Leyte, and Bicol. 

Living conditions in the metro seem worse for most Filipinos with the ECQ implementation. Funding your moving costs with a personal loan can help you go back to the province and start anew. Moving costs may include vehicle rental at a minimum of PHP 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 PHP 1,500.

13. Home Office Setup

loan purposes - home office

The shift to work-from-home arrangements provides comfort to a lot of Filipino workers during this pandemic. As more and more employers adopt this work setup, remote workers should think of leveling up their home office.

One of the loan purposes you should consider is to fund a new laptop or computer purchase, preferably with at least 4GB RAM processor. You may also need to buy a roomier or sturdier 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. 

14. Pregnancy

Another unexpected event you might need a loan for is pregnancy, which has become more expensive during the pandemic.[5] The need for swab tests before getting admitted to a hospital and a more secure mode of transport for checkups and consultation can take a toll on your budget. Also, pregnant women need to pay for the personal protective equipment of medical workers who will be attending to them during delivery. 

15. Making Ends Meet

The government-imposed lockdowns led to the temporary closure of businesses offering non-essential goods and services. As a result, employees of these establishments suffered reduced working hours and earnings. Instead of receiving a whole month’s worth of salary, they receive pay only for the days they reported for work.

This is probably the best reason for loan approval since even the GSIS, SSS, and Pag-IBIG provide loans to members affected by the pandemic.  

16. Funeral Expenses

Losing a loved one unexpectedly is a situation that requires immediate cash to pay for funeral and burial expenses. The cost of a funeral in the Philippines is no joke. A casket can cost anywhere from PHP 3,000 to PHP 100,000, while a memorial chapel rental can cost anywhere from PHP 1,000 to PHP 10,000 per night. 

Preparing for funeral expenses seems awkward, or even morbid, since no one enjoys talking about death. This could be the reason a lot of Filipinos still don’t save for their death expenses. More often than not, it’s their loved ones who would opt for a personal loan when a death in the family happens. 

17. Personal Milestones

loan purposes - personal milestones

Celebrating small wins seems unreasonable at first. But it can mean recognizing your hard work and excellence, which will inspire you to achieve more in the future. So another thing to include in our list of loan purposes is celebrating milestones in life, like birthdays, graduations, academic excellence, childbirth, and anniversaries, just to name a few. 

But celebrating doesn’t only mean having a feast. Buy yourself or a loved one a gift, or upgrade equipment or gadgets they use for work and school.

Final Thoughts

These productive uses of personal loans can help you achieve your financial goals and stay on top of your finances. Having the right loan purposes can also help you choose the best personal loan in the Philippines and effectively plan your repayments. With a personal loan from a reputable lender in the Philippines, you’ll get a fixed repayment term and interest rate, so budgeting every month can be simple and seamless.

Applying for a personal loan is easy. If you’re employed or self-employed for at least two years with a minimum required income, you’re qualified. Before sending an application, make sure that you compare the best personal loans offered in the country.

Where to Apply for a Personal Loan

Looking for a personal loan? Below is a list of trusted personal loan companies 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

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