Personal Loan Glossary
Amortization
Amortization is the method of paying back a personal loan through regular instalment payments. It is advised to have a good payment history with your monthly amortization so you can use this to build a good credit history.
Amortization Period
This is the time period that the lendee is required to pay off the total loaned amount.
Borrower
This is the person who has borrowed from the bank or lender in order to fulfill his immediate monetary needs.
Fixed Rate Loan
Some banks offer a fixed rate loan instead of increasing the loan amount as the loan tenor gets older.
Guarantor
This is a person who is a co-signor of the lendee and commits to pay off the debt of the lendee in case he loses the capacity to do so.
Interest
This is additional charge from the bank on the borrowed amount that you got from them. This is the assurance that that you will pay them back granted that they already gave you a big amount that they need to get back from you with additional profit.
Late Payment Fees
This are the charges incurred when you pay your amortization past the due date mutually agreed by you and the lender
Lender
The institution that lends the money to the borrower with a fixed period and amortization in order for them to achieve their goals.
Lending Companies
Lending companies are tools that you can use in order to get in good debt. They are regulated by the Bangko Sentral ng Pilipinas and comply to the same set of rules set by the Securities and Exchange Commission.
Liabilities
These are the payables under your names that may affect your personal loan application.
Maximum Loan Amount
The maximum loan amount is the maximum amount that you can borrow at a financial institution based on your loan tenor, income, and credit history.
Principal
The principal is the co-maker of the loan and responsible for paying the personal loan in case the borrower runs away from his responsibility of paying it himself.
Tenor
This is the duration of the personal loan on when it needs to get paid. You need to determine if you can get an amortization of 30% per month as mandated by the Philippine Banking Law.

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