Best Options For Personal Loan in Philippines (2024)

Do you need extra cash for a big buy, an unexpected cost, or to merge your debts? A personal loan in the Philippines might solve your problem. Many lenders now offer good rates and easy terms making personal loans a go-to money option for Filipinos, including OFWs and freelancers.

When you think about getting a personal loan in the Philippines, you must know your choices and pick the best one for you. This article will show you the top personal loan in Philippines key things to think about when you apply, and ways to handle your loan well. You’ll also learn about the good points of personal loans, what people use them for, and how to boost your chances of getting approved.

Top Personal Loan Providers in the Philippines

When you need a personal loan in the Philippines, you can pick from several options. Let’s check out the best providers in different groups:

Banks

Regular banks give good rates and dependable services. HSBC offers cash loans up to ₱500,000 perfect to pay for education. CIMB Bank stands out because it has one of the lowest interest rates and you can apply online. BPI has a cheap option with a 25.60% yearly contract rate. Metrobank lets you borrow up to ₱2 million with rates as low as 1.25%, while UnionBank gives you the most time to pay back, up to five years.

Online Lenders

Online lenders offer fast and easy-to-get loans. Digido, Crezu, and Binixo stand out for their speedy approvals and good rates. These websites have more relaxed rules making them a good fit for different money situations. But it’s key to look at APRs side by side and check the fine print to make sure you’re getting the best offer.

Peer-to-Peer Lending Platforms

Blend.ph stands out as a top peer-to-peer platform in the Philippines. You can borrow and invest on this platform, with potential yearly returns hitting 30%. Blend.ph checks how creditworthy borrowers are and gives you tools to handle risk. If you want a safer bet, try Blend.ph’s Auto-Invest feature. It offers a risk-free 9% yearly interest on what you put in.

Things to Think About When Picking a Personal Loan

When you’re on the hunt for a personal loan in the Philippines, a few key things can sway your choice. Here’s what you should keep in mind:

Interest Rates

Watch out for both the interest rate and the Annual Percentage Rate (APR). The APR has an impact on additional fees showing you a clearer picture of the loan’s total cost. Even loans with low interest rates can have high APRs so compare them .

Loan Terms

Repayment periods last from 12 to 60 months. Shorter terms lead to higher monthly payments but less interest overall. Longer terms offer lower monthly payments but higher total interest. Pick a term that fits your budget well.

Processing Time

Many online lenders approve loans sometimes within hours. For example, UnionBank can process applications in as little as 24 hours. If you need money fast, processing time could play a key role in your decision.

Eligibility Requirements

Each lender sets their own rules. These often include how much you earn how much debt you have compared to your income, and your credit score. Some loans need a credit score of 600, while others don’t. If you can’t meet all the rules, getting someone to co-sign might help your chances.

Benefits of Personal Loans

Flexibility

Personal loans give you lots of choices for how to use the money. You can ask for a loan even if you’re not sure what you’ll do with it. You might use it for a wedding, a trip, school costs, or fixing up your house – it’s up to you. You also have options with how much to borrow. Loans can start as small as PHP 10,000, so you can get just the amount you need.

Lower Interest Rates

Personal loans offer a big plus: cheaper interest rates than credit cards. In February 2024, you’d pay about 12.49% interest on a 24-month personal loan. Credit cards though? They’d hit you with 21.59% on average. This gap can save you a bunch of cash as you chip away at what you owe.

Debt Consolidation

Personal loans shine when it comes to combining debts. You can roll all your debts into one fixed payment each month. This move not only makes your finances simpler but might also cut down your interest costs. It’s way easier to keep track of your debt this way. You’ve got just one date to remember for payment, and you can often set up automatic payments.

How to Apply for a Personal Loan

Online Application Process

You can now apply for a personal loan in the Philippines through a simple online process. Many lenders let you apply on their websites or mobile apps. For example, you can use the CIMB Bank or Zuki mobile app to submit your application. The steps are easy: complete the online form, upload needed documents, and send it in. Some lenders, like UnionBank even give instant approval to qualified account holders.

Required Documents

You’ll need to provide:

Valid government-issued ID with photo and signature
Proof of income (payslips, ITR, or Certificate of Employment)
Proof of address (utility bills or lease agreements)

Self-employed applicants might need to provide extra paperwork such as business registration certificates.

Tips to Get Approved

To boost your approval odds:

Look up your credit score first
Figure out the exact sum you need
Look at options from different lenders
Think about getting a co-signer if your credit isn’t great
Get all needed papers ready before you apply

Keep in mind, borrowing helps maintain good money habits.

Common Uses for Personal Loans in the Philippines

Personal loans in the Philippines give you room to handle different money needs. Here’s what people often use them for:

Education Expenses

You can take out personal loans to pay for school fees, get textbooks, and buy needed tech like laptops for your classes. These loans also help fund programs to study in other countries making your school experience better.

Home Improvements

If you want to do a big makeover or small fixes personal loans can pay for your home projects. From putting in a new kitchen sink to redoing whole rooms, these loans give you the money you need to make your home nicer.

Business Funding

If you’re kicking off or growing a small business personal loans can help out. You can put the money to work for stock, wages, space rental, or other company costs. Just make sure to read the fine print to check if using it for business is okay.

Emergency Expenses

Personal loans come in handy when you’re hit with surprise money troubles. Whether it’s doctor bills fixing your car, or losing your job, these loans give you quick cash. This helps you deal with unexpected problems without adding more money stress.

Getting to Know Personal Loans in the Philippines

Definition

A personal loan is money you borrow to use for anything you want. You pay it back each month. This type of loan gives you freedom to borrow a set amount between ₱10,000 and ₱2,000,000, depending on who lends it to you.

Types of Personal Loans

Secured Loans: You need to put up something valuable as a guarantee. This lets you borrow more money, get lower interest rates, and have more time to pay back.
Unsecured Loans: You don’t need to offer anything as a guarantee. These loans get approved faster and you can use them for more things.

Key Features

You can borrow between ₱10,000 and ₱2,000,000
You can pay back over 3 to 60 months
Interest rates might be fixed or change over time
You often don’t need to put up anything as security
You can use the money for many things, like medical bills school fixing up your house, or personal stuff
You need to make at least ₱120,000 a year to qualify
You have to be between 21 and 65 years old
Looking at Bank vs. Online Lender Personal Loans

When you want a personal loan in the Philippines, you can choose between two main options: traditional banks and online lenders. Each option has its pros and cons, so you need to know how they differ.

Interest Rates

Online loans have higher interest rates than bank loans. This happens because online loans often don’t need collateral. Banks offer lower rates but might ask for collateral for bigger loans.

Approval Process

Online lenders stand out for their ease and quickness. You can apply from your home often with few documents, and get an answer within a day. Bank loans, while cheaper, involve a tougher screening process and need more paperwork.

Loan Amounts

Banks offer bigger loans making them a good fit for major expenses like buying a house or a car. Online lenders provide smaller amounts, which might not be enough for bigger financial needs.

Repayment Terms

Bank loans often come with longer payback periods giving you more time to return the money you borrowed. Online loans usually have shorter terms, which can mean you’ll pay more each month but might pay less interest in the long run.

Top 5 Personal Loan Providers in the Philippines

1. BPI (Bank of the Philippine Islands)

BPI has a user-friendly online application process, which works best for existing customers. You’ll see competitive interest rates and might get faster approvals if you already have a BPI account. New customers though, might need to wait longer for their application to go through.

2. Security Bank

Security Bank is known to offer low interest rates and flexible terms. They let you pick a repayment plan that suits your budget. While their rates are competitive, you might need to borrow more money to start compared to other lenders.

3. RCBC (Rizal Commercial Banking Corporation)

RCBC puts emphasis on quick and easy online applications. This bank could work for you if you need a fast decision. Keep in mind that interest rates may be higher, and loan amounts lower when compared to other banks.

4. Metrobank

Metrobank gives customers many loan options and great service. You’ll find various choices to fit your needs, but applying online might take more steps than with some other banks.

5. BDO (Banco de Oro)

BDO offers a safe and reliable online platform to apply for loans. The process is easy to use and simple. However, interest rates might be a bit higher if you don’t have an account with them, and it could take longer to get approved depending on your situation.

How to Qualify for a Personal Loan

Income Requirements

To qualify for a personal loan, you must show you have a steady income. Lenders want to see a minimum monthly income of ₱15,000 for people with jobs and ₱30,000 for those who work for themselves. Your debt-to-income ratio plays a key role, as it reveals how well you handle your current debts and if you can take on more. Lenders also look at your free cash flow, which is the money you have left after paying for your basic needs.

Credit Score Considerations

Your credit score has a big impact on loan approval. Most lenders want a minimum score between 560 and 660. A better score can result in lower interest rates and better terms. If your score falls under 630, you might still get approved, but expect to pay more interest. Some lenders don’t just look at the credit score. They also think about things like how you’ve paid bills in the past and how much of your credit you’re using.

Employment Status

Your job situation affects loan approval. People with full-time jobs and a steady work history look good to lenders. But if you work part-time or for yourself, they might look at your application more . Lenders want to see at least two years of work history. If you work for yourself, you might need to show extra papers, like tax returns and financial reports, to prove your income is stable.

Tips for Managing Your Personal Loan

To manage your personal loan well, start by making a detailed budget. Keep track of what you earn and spend each month making sure you have enough to pay your loan. Set up automatic payments to avoid missing due dates, which can hurt your credit score. Think about signing up for payment reminders through your bank or budget apps for extra peace of mind.

Creating a Repayment Plan

Make a list of all your debts, including your personal loan, and rank them based on interest rates or how much you owe. Focus on paying off one debt at a time while making minimum payments on the rest. This method helps you make real progress and might save you money on interest.

Avoiding Late Payments

Late payments can hurt your credit score. To stop this from happening, turn on autopay or set reminders a few days before bills are due. If you’re having trouble, focus on bills that affect your credit and think about moving payment dates to match when you get paid.

Early Repayment Options

Paying off your loan can help you save on interest. But first, look for any fees for paying before you make extra payments. Some lenders, like SoFi and LendingClub, don’t have these fees, which makes paying a better choice.

The Rise of Personal Loans in the Philippines

Growing Demand

You’ve seen more and more personal loans popping up in the Philippines. This trend has an influence on several things, like money troubles from job loss and the need for quick cash. Many Filipinos those who don’t make much, are using personal loans to pay for daily stuff and keep their heads above water when times are tough.

Technological Advancements

The future of lending is going digital, no doubt about it. Tech companies are leading the charge with new high-tech solutions. These days, you can ask for loans online, get quick approvals, and handle your money without breaking a sweat. This shift to digital has made personal loans easier to get and more user-friendly than old-school banking.

Economic Factors

The pandemic has had a big impact on lending. People and companies have struggled with money due to economic uncertainty. The government took action to help by putting in place loan pauses and giving out money. These steps have aided regular folks and banks in getting through tough times, which has led to more people taking out personal loans in the Philippines.

Key Features of the Best Personal Loans

Low Interest Rates

When you look for a personal loan in the Philippines, you’ll see APRs from 8% to 35.99%. Your credit score is important in deciding your rate. A score of 800 or higher can get you the best rates, but if your score is under 580, you might end up with higher APRs.

Flexible Terms

Top personal loans give you options to pay back over 24 to 84 months. If you’ve got a high credit score, you might get up to seven years to repay giving you more breathing room. Companies like Upgrade and Universal Credit don’t set a minimum income, which makes it easier for more people to get loans.

Quick Approval Process

A lot of lenders now let you apply online and get quick answers. You can often know if you’re approved in minutes and see money in your account in a day or two. Some lenders even let you check if you qualify without hurting your credit score.

Minimal Requirements

While requirements differ, some lenders accept applicants with minimal credit history or lower credit scores. They might look at things like your schooling, earnings, and job background along with your credit score to assess your application.

Comparing Secured vs. Unsecured Personal Loans

Definitions

When you look for a personal loan in the Philippines, you’ll find two main types: secured and unsecured. Secured loans need collateral, like your car or an investment account. Unsecured loans don’t require any assets as backing. This main difference affects many aspects of the loan, including interest rates and qualification needs.

Pros and Cons

Secured loans tend to have lower interest rates and higher borrowing limits. You might find it easier to qualify with a lower credit score. But if you default, you could lose your collateral. Unsecured loans don’t put your assets at risk, but they come with higher interest rates. You’ll need better credit to qualify, but you’ll have more freedom in how you use the money.

Which One to Choose

Your choice hinges on your money situation and aims. A secured loan might suit you best if you own valuable things and want lower rates. An unsecured loan could work better if you need more wiggle room and less danger to your stuff. Think about your credit score how much you want to borrow, and how okay you are with using collateral before you decide.

How to Figure Out if You Can Afford a Personal Loan

To know if a personal loan fits your budget, look at these main things:

Debt-to-Income Ratio

Work out your DTI by dividing what you owe each month by what you earn before taxes. Lenders like to see a DTI under 36%. A lower DTI shows you’re in good shape with money and boosts your chances to get a loan.

Monthly Budget Analysis

Make a budget to keep an eye on your expenses and spot areas where you can spend less. Set aside money for loan payments as a must-have expense. Think about using the 50/30/20 budget plan to balance needs, wants, and savings in a good way.

Using Loan Calculators

Use personal loan calculators to figure out monthly payments based on how much you borrow, the interest rate, and how long you have to repay. These tools help you understand the total loan cost and decide if it fits your budget without strain.

Common Mistakes to Avoid When Getting a Personal Loan

Not Reading the Small Print

When you’re keen to get a personal loan, you might want to skip reading the small print. But this mistake can result in expensive problems. Look at the interest rates, fees, payback terms, and fines. Knowing these facts helps you steer clear of shocks and make smart choices about your loan.

Borrowing Too Much

Getting a bigger loan than you need can put your money future at risk. Keep in mind, you’ll need to pay back every penny plus interest. Borrowing extra for things you don’t need can cause unneeded debt and worry. Just borrow what you need to avoid money troubles down the road.

Looking Past Personal Loans

Before you decide to get a personal loan, check out other choices. Credit cards borrowing from friends, or using your home’s value might work better for you. Each way to borrow money has good and bad points so think hard about what’s right for you. Don’t jump into a personal loan without looking at all your options first.

Personal Loans in the Philippines: What’s Out There

The Big Picture

Personal loans in the Philippines are on the rise. You can find all sorts of loans, from ones you pay back over years to quick short-term options. These loans aim to help people of all ages and income levels. more people with less money borrow than those who earn more.

Who’s Who

Banks and online lenders rule the market offering many loan types. You’ll see that lenders often aim at specific groups, with some targeting higher-income customers to handle risk. The rivalry has resulted in more flexible products and faster decision-making.

Recent Trends

You’ll notice a move toward unsecured lending, with credit cards and salary-backed loans growing fast. The market also adapts to changing customer needs, focusing on smooth application processes and quick approvals. Still, this growth in riskier lending might increase system-wide risks down the road.

Eligibility Criteria for Personal Loans

Age Requirements

To get a personal loan in the Philippines, you need to be between 21 and 65 years old. Some lenders set tighter age limits, like 23 to 58 years old.

Income Thresholds

Most lenders ask for a minimum yearly income, from ₱180,000 to ₱360,000. Your income shows you can pay back the loan. Some lenders might look at multiple ways you make money.

Credit History Considerations

Your credit score has a big impact on loan approval. In general, a FICO score of 670 or higher is seen as good. Some lenders might accept scores as low as 600, while others want 700 or more.

Employment Status

People often choose full-time jobs, but lenders may accept part-time, self-employed, or contract workers too. Most lenders want to see a steady job history, and some ask for at least two years at the same workplace.

Documents Required for Personal Loan Applications

When you apply for a personal loan in the Philippines, you need to show several papers to prove who you are how much you earn, and how stable your finances are. Here’s a list of the key documents:

Identification

You must have a valid ID from the Philippine government with your photo and signature. This could be your driver’s license, passport, or another official ID.

Proof of Income

For people with local jobs, hand in your most recent three months’ pay stubs or BIR Form 2316 (Income Tax Return). Those who work for themselves should give Audited Financial Statements from the last three years or their latest Income Tax Return.

Bank Statements

Banks ask to see your bank statements from the past three to six months. These papers help check your income how you spend money, and your overall money situation.

More Things You Might Need

Based on your job type, you might have to give a Certificate of Employment, DTI/SEC Business Registration Certificate, or Latest Employment Contract if you’re an OFW.

Getting to Know Personal Loan Interest Rates and Fees

When you’re thinking about getting a personal loan in the Philippines, you need to understand the different types of interest rates and fees that come with it. Lenders show two types of interest rates: monthly add-on and effective interest rates. The effective interest rate also known as Annual Percentage Rate (APR), shows the real cost of borrowing, including all fees and charges. Lenders figure it out using a complex formula that looks at the principal amount monthly payments, loan term, and fees.

Types of Interest Rates

Monthly add-on interest rates have popularity in the Philippines. They come from adding the loan amount and yearly interest rate then multiplying by the payback years. This leads to you paying more each month. When you compare loans, search for lower monthly add-on rates to save money.

Annual Percentage Rate (APR)

The APR offers a better way to compare loan costs than just looking at interest rates. It includes the stated interest rate plus any fees you can’t avoid, like origination and application fees. APRs for personal loans range from 6% to 36%. Borrowers with good to excellent credit scores (690 and higher) tend to get the lowest rates.

Hidden Charges to Keep an Eye On

Keep an eye out for hidden fees that might surprise you. These can include processing costs early repayment penalties, charges for late payments, fees for canceling, and costs for duplicate paperwork. Always check the small print and ask your lender straight up about any specific charges you want to steer clear of. Knowing about these fees will help you make a smart choice and find the right personal loan for what you need.

Ways to Make Your Personal Loan Application Stronger

Increasing Your Credit Score

To boost your loan approval odds, work on bettering your credit score. Make sure you pay bills on time always, as this has a big effect on your score. Try to use under 30% of your open revolving credit, since high credit use can signal risk to lenders. Look at your credit report often to catch and fix any mistakes or odd activity.

Reducing Existing Debt

Reduce your debt-to-income ratio (DTI) to boost your chances of getting a loan. You can figure out your DTI by dividing what you owe each month by what you earn before taxes. Try to keep your DTI at 36% or below if you own a home, or between 15-20% if you rent. Focus on paying off your current debts to make your finances look better and increase your odds of getting your loan approved.

Choosing the Right Loan Amount

Think about how much you need to borrow. Ask for the amount you need for your specific goal. To consolidate debt or make big purchases, work out the exact sum you need. For home upgrades, add 5-20% to your estimate to cover surprise costs. Keep in mind, asking for less money can boost your chances of getting approved if you’re just on the edge of qualifying.

FAQs

1. What banks in the Philippines are known for approving personal loans with ease?
Answer: The question does not specify which banks in the Philippines are known to approve personal loans .

2. Which bank should I choose for the best personal loan rates?
Answer: To find the best personal loan rates, you need to check with local banks in the Philippines. The original answer lists banks in India, but this won’t help you in the Philippines.

3. How can I obtain a loan of 30,000 Pesos in the Philippines?
Answer: You have several options to get a loan of 30,000 Pesos in the Philippines. Big banks like BPI, BDO, and Security Bank offer personal loans for this amount. You can also look into online lending apps, government loan programs, cooperatives, and lending companies to borrow 30K pesos.