How to get a Student Loan in the Philippines
Once you have finished high school you may want to pursue your higher education. Although many students struggle to finance their studies, your personal financial situation shouldn’t prevent you from going to college, since an investment in your personal education will most likely pay off itself. Various statistics have shown, that college educated people have higher average salaries. There are many programs, which can support you as a student financially and enable you to focus on your studies.
Student Loans are supported by the government
The state owned Development Bank of the Philippines (DBP) has created a student loan facility called the Higher Education Loan Program for Students (HELPS). They gave out about P2 billion to educational institutions, which will lend it out to students. It is the institutions’ obligations to select the students. A student can cover their expenditures related to the education with the loan. This is only one program, which is supported by the government. Depending on your university, you may apply for other programs as well.
Most government sponsored programs in the Philippines have less money than they have applications for. Therefore, they need to select eligible students. This usually is highly competitive and mainly based on your previous academic performance. Before you apply for a student loan, you should also check if you could get any scholarship, which would be even better than borrowing money.
Student Loan Application Procedure
The way how an application works differs from program to program and from university to university. However, they are alike when it comes to required paperwork for a student loan in the Philippines. Most importantly, fill out the application form correctly and fully. Usually, you are also required to hand in a billing statement from the school. Some student loans require a proof that you really need a loan. The SSS program for example requires a proof that your family’s monthly earnings is PHP 25,000 and below.
Due to all the differences, it’s best to get information for each program individually.
Applying for student loan with bad credit
Especially when you apply for a private student loan in the Philippines, a bad credit score might make the process more difficult, however there are ways to deal with it.
Nowadays, it is not as difficult to get a student loan with a bad credit score as it used to be. You might have to pay a risk premium, which means slightly higher interest rates or the bank demands collateral of higher value.
Another possible way is finding a co-signer for your student loan. This will lower the interest rate and increase the probability that the bank will let you take out the loan. Very close friends or family members such as parents or siblings might be willing to support your educational goals.
Maybe you don’t want to apply for a student loan, instead you can apply for a personal loan and compare which one has the best rate!