Applying For A Personal Loan In The Philippines

What Is A Personal Loan?

Filipinos apply for personal loans for a lot of reasons like funding their education or buying something that they need. This type of loan provides a cash advance to borrowers if they are short on cash. In the Philippines borrowers have the option to repay the loan in six, twelve, eighteen, twenty-four or even thirty-six months. Lenders in the Philippines offer 2 types of personal loans; the first one is a secured personal loan and the second is an unsecured personal loan.

Secured Personal Loans

Secured personal loans are loans that require collateral or needs to be tied to an asset like a car or a home. As such, the interest rates for secured loans are usually much lower than unsecured loans. However, borrowers need to be careful as their pledged assets are in the risk of repossession if they default on the loan

Unsecured Personal Loans

The main advantage with an unsecured personal loan is that the bank doesn’t require collateral. Banks take on a higher risk of losing money which is why the policies for this type of loan are more stringent. Lenders base their decisions on your credit history if you are applying for an unsecured loan. If you have a good credit history and you can convince your lender that you will not shirk from your responsibilities then your loan will have a higher chance of being approved. In spite of the very high percentage of rejection this type of loan still seems to be the most enticing form of bank loan in the Philippines due to its leniency.

Personal Loan Interest Rates

Interest rates for personal loans in the Philippines vary from one credit provider to the next. In the Philippines it’s not possible to be granted with a loan that would require a borrower to pay a monthly payment that exceeds more than thirty percent of his gross monthly income. However, there are ways to increase the loan amount and this can be done through the help of a co-borrower or by providing supporting financial documents like land titles or rental contracts.


When applying for a personal loan make sure that you only get the exact amount for your intended purpose because borrowing more than what you need will mean you need to pay higher interest rates. Finally when looking for a loan provider always see to it that you choose a bank that offers affordable, flexible and convenient repayment schemes.


Find out here which bank has the lowest personal loan interest rate in the Philippines!

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