Personal loan Philippines – 12 things you need to know

Personal loan are the salvation for those who are experiencing economic difficulties. Loans for personal consumption include two forms, which are unsecured loans and secured loans. Today we will help you distinguish between these two loan types.

Table of Contents

What is personal loan?

Personal loan is a form of loan to support your dailly needs, such a shopping, household goods, car purchase, study abroad, wedding, traveling, furniture purchase, house construction, and other needs. other inevitable in everyday life.

There are two types of personal loans is: secured and unsecured.

A secured personal loan requires collateral, means that borrowers have to mortgage their assets, like cars, houses, land, … in case the borrower loses the ability to repay, these assets will be transferred to the bank for liquidation.

On the other hands, unsecured personal loans don’t need to put up any kind of collateral. Unsecured personal loans are much more common in the Philippines, though secured loans are also available.

Unsecured loan

Unsecured loans pay higher interest rates than other secured loans

The current form of unsecured loans is very fast and convenient, borrowers will receive money right after disbursement, and of course, there is no need to mortgage any assets and no guarantee by the company.

The loan amount will be reviewed by the bank or credit institutions, possibly 6 to 20 times your current salary.

There is a downside that the interest rate for unsecured loans is much higher than other forms of loans.

For unsecured loans, when you pay the loan ahead of time, there will be a fee, and this fee depends on each bank.

Benefits of unsecured loans

  • Unsecured loans do not need collateral (the lending institution does not require any collateral), to get another loan you need to have collateral for the lender, for example: land use rights, savings book or car …
  • Simple application procedure: The customer provides the least personal papers, which is much simpler than a mortgage loan.
  • No need to pay attention to the details of the loan purpose: You do not need to disclose the details of the use of your loan, as long as it is for consumer borrowing purposes, credit institutions are interested in liquidity. your math more.
  • High loan amount: You can easily get a quick loan with the maximum loan amount up to 1 million PHP. There are banks to support up to 1 billion.

Customers participate in unsecured loans often to solve the shopping, consumption and entertainment needs of themselves and their families (buying a car, fixing a house, traveling, getting married …). Therefore, unsecured loans are usually from 5.000 – 25.000 PHP. The loan period depends on the regulations of banks and credit institutions, mostly from 12 months to 48 months.

Secured loan

The secured loan is the traditional form of bank lending. This form of loan is more secure, less risky because when borrowing money, borrowers have to mortgage the papers related to the collateral.

With this form of loan, the interest rate has more incentives. However, when applying for collateral, it is necessary to have collateral of value to be able to borrow money and if there is a bad case of not being able to repay the debt, the right to use the property will be lost.

As for the form of mortgage loan, it is possible to borrow a large amount and of course, the borrower must also own an equivalent large asset block, the loan amount can be up to several million pesos. This form of mortgage loan you can use to do business, trade, invest, …

Benefits of mortgage consumer loans

  • Large loan amount, maybe 100.000 – 10.000.000 PHP. The amount depends on the purpose of your loan, depending on the rules of each bank and the value of the collateral. Usually the amount that banks can lend is up to 80% of the collateral value.
  • Mortgage interest rates fluctuate 14% – 16% / year on average, lower than unsecured loans.
  • The maximum loan term lasts up to 15 years.

Interest rate and loan limit

Interest rate

The personal loan interest rate will be different depending on the loan product that customers choose as well as depending on the lender. Currently, according to the latest state bank report, the current interest rate for business loans at consumer loan interest rates ranges from 6% – 28% depending on the form that customers choose.

Loan limit

Depending on the financial ability of each individual, the customer will consider the most suitable loan limit.

Accordingly, the minimum loan limit of banks is currently 10 million VND and maximum 300 million VND for the form of unsecured. However, some banks offer loans with higher limit up to VND 500 million such as: Metrobank….

As for loans in the form of collateral, the limit will range from 70% – 100% of the value of the collateral.

For your reference, below are the different personal loan providers and the maximum amount of loans they offer.

Bank/Financial institutions Maximum amount
Citi Bank PHP 2,000,000
Security Bank PHP 2,000,000
EastWest Bank PHP 2,000,000
Cashwagon PHP 20,000
Digido PHP 25,000
RFC PHP 50,000
Global Dominion Salary Loan PHP 100,000
South Asialink OFW Loan PHP 250,000

Requirement and procedures for personal loan

Personal loan requirement

  • Philippines citizer from 20 years old, with full legal capacity expressed through civil legal capacity and civil behavior.
  • Has legal loan purposes and is in accordance with the bank’s policy.
  • Have an effective plan for using capital

Personal loan procedure

  • ID card / citizen identification / passport
  • Household registration book, temporary residence book, confirmation of temporary residence (if any)
  • Labor contract
  • Demonstrate financial:
    • Unsecured loan: Confirm salary or payroll (if receiving cash salary), payroll account statement (if receiving salary transfer)
    • Secured loan: Records of collateral include land title, construction permit (collateral is real estate), vehicle registration, registry, civil insurance (collateral accept is the means of transport).
  • Loan application form according to the specific form of each bank.
  • Other documents as prescribed by the bank.

Personal loan calculator

To calculate the loan, please refer to some of the tools the bank developed for you


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