What you need to know about personal loans
Suppose you get the best personal loans Philippines where the lending company offers you the exact amount that you need and at an affordable rate, you will have hit two birds with one stone. With the best rates personal loan Philippines, you will have borrowed money that you can pay without straining. Also, getting the exact amount that you needed means that what necessitated borrowing, will be met adequately. In this article, we will be exploring personal loan Philippines where we will start by understanding what is a personal loan, look at different types of personal loans and where you can get them, compare personal loan rates “near me” as well as attempt to answer some frequently asked question on this topic.
What Is a Personal Loan?
From a general point of view, a personal loan can be described as money that is borrowed from a lender which can either be a bank, credit union, public agency, or platforms such as DiGiDo, MoneyCat, Online Loans Pilipinas, Kviku, and UnaCash among others online lending money platforms. This money is paid back with some interest and within a relatively short period when compared with other types of loans. When talking from specific terms, one of the distinguishing factors between a personal loan and other types of credit is the purpose of the loan. For other loans, one needs to state the specific intention of borrowing, which could be, you want to buy an asset, starts a business, or any other use but for a personal loan, the money can be used for any expenditure. One does not necessarily indicate the purpose of use during the application process, stating that the money is for personal use is enough. Another characteristic of a personal loan revolves around collateral. The loans are normally not secured, meaning that a borrower will not be asked to provide an asset or any other type of collateral.
How do personal loans work?
Given that personal loans are unsecured, the lender will decide whether to advance and the amount to extend as credit. For bank loans in the Philippines factors such as credit score, debt history, and the debt-income ratio will play out. For some lending companies especially platforms lending money online, some factors such as credit score and debt history might not carry much weight. Some are more into the ability to repay the loan, that is, whether the borrower has income such as salary or business earnings that will help in repayment. For those who for one reason or another are found ineligible for a non-collateral loan, some lending institutions may offer a co-signed or a secured personal loan where. With such type of credit, the borrower will use an asset as collateral such that in case of a default the lender can repossess it. A co-signed or guaranteed personal loan involves an additional applicant who will be responsible in a case of default. Other personal loans include variable-rate loans where the rates and payments may change or the fixed-rate loans where the terms such as rate and installments remain the same throughout the period.
Where to get personal loans and interest rates in the Philippines
One of the factors that borrowers need to consider when taking an online or bank loan for personal use is the interest rate. Interest rate denotes the amount that you will pay on top of the principal amount or the money that was advanced. In simpler terms, it is what the lender will take home for allowing you to use his or her money. When you compare the rates offered by different banks as well as platforms offering money lending online, you will discover that they offer varied rates. As a borrower, you need to compare the rates and go for one that offers the most competitive bargain. While some may be charging relatively higher interest rates, there are some areas where they have catered to specific needs. For instance, you may find that a money lending company is offering the lowest rates but an individual borrower may not qualify to take such a loan due to the requirements put by the lender. While interest rates may be a good pointer as far as the affordability of a personal loan is concerned, you also need to look at other factors such as the requirements, the minimum and maximum loan amounts, and repayment duration among others. In the table below, we have provided a list of lenders indicating the interest rates they charge per day as well as the personal loan limits.
Table 1: Non bank online lenders personal loans interest rates and limits
Credit company | Interest per day | Minimum amount | Maximum amount |
DiGiDo | 1% | 1,000PHP | 10,000PHP |
MoneyCat | 0.54% | 500PHP | 20,000PHP |
Online loans Pilipinas | 1% | 500PHP | 20,000PHP |
Kviku | 0.16% | 500PHP | 25,000PHP |
UnaCash | 0.3% | 1000PHP | 50,000PHP |
Cash Mart | 3.5 % | 3,000PHP | 30,000PHP |
Pera247 | 0.83% | 1000PHP | 15,000PHP |
PeraJet | 0.5% | 5,000PHP | 50,000PHP |
Quick Pera | 1% | 5,000PHP | 15,000PHP |
Table 2: Bank personal loan monthly interest rates
Bank | Personal loan monthly interest rate |
|---|---|
Citi Bank | 1.3 % |
East West Bank | 1.89 % |
Security Bank | 1.89 % |
HSBC | 1.22 % |
May Bank Philippines | 1.3 % |
BPI | 1.5% |
Apart from the above listed there are other banks that offer personal loans in the Philippines. Some of them include:
SSS Bank
Pag-IBIG
BPI Bank
CIMB Bank
RCBC Bank
CTBC Bank
PBCom Bank
PSB Bank
ING Bank
Application for a personal loan
Once you have settled on a given lender, you now need to embark on the application process. While different lending institutions may have different application requirements, the process largely remains similar. The process involves filling out an application form, where you provide personal details that are supposed to help the lender to make a decision. Nowadays, the application process for bank and non-bank loans in the Philippines has been made easier as the borrower can complete everything online. It is important to read through the whole application form before filling it out. This will help you understand the requirements. Financial advisors are in agreement that understanding the loan requirements is the basis of making the best decision. You will not go in blindly; meaning that the decision that you make will not come to haunt you later. Some so many borrowers have found themselves in deep financial problems for failure to read and understand the loan requirements as well as the terms and conditions governing the credit assistance. While still in the application process, you may note that banks and non-bank lenders have different requirements. Bank requirements are normally stringent while non-bank online personal loan platforms are lenient especially for those who may be unemployed or with bad credit.
Personal loan requirements
Basic personal loan requirements include:
Having an income, whether from employment or business; as a proof, you may be asked to provide a pay slip or a bank statement.
Identification documents; this allows the lender to verify the real borrowers. With increased cases of fraud such as impersonation, no one would want to take a chance.
Proof of residence where the borrower may be required to provide a utility bill or a bank statement; this is most common with non-bank lenders.
Personal loans present borrowers with an opportunity to meet their urgent financial needs. With various entities both bank and non-bank lenders offering different types of personal loans, borrowers are spoilt for a choice. All that one has to do is select the lender who meets the needs. Among the factors that a borrower needs to consider when selecting the best personal loan in the Philippines include the interest rates, exceptions such as credit rate and history, whether a borrower considers the temporary unemployed individuals, and flexibility in repayment period among others. With personal loans, those with bad credit scores have a chance to improve their rating especially when they borrow from lenders who do not ask for credit history. Also, remember that when you borrow, commit to repay and stick with it, avoid default or late repayment, this is the way to good credit history and also out of financial problems which may be brought by debts.
FREQUENTLY ASKED QUESTIONS
1. What Personal Loan Can I Get With Bad Credit?
A personal loan is a money that is borrowed either from banks or other types of lenders where the borrower does not specify the use. This type of loan is normally unsecured and a borrower may need to produce a credit history and/or show the capacity to repay, either from business or employment income. Some lenders do not ask for credit history, therefore a borrower with bad credit may qualify for a personal loan. However, the borrower must demonstrate that he or she can repay the loan. Also, given the nature of risk, such kind of arrangement attracts relatively higher interest charges.
2. Which Personal Loan Is Easiest To Get?
Depending on your source of income, here are some of the personal loans that are easy to get. For online cash loans: DiGiDo, MoneyCat, Online Loans Pilipinas, Kviku, and UnaCash. For salary loan: Global Dominion; Business loan: Esquire, First Circle, and Zenith; Bank personal loan: Citi Bank, East West Bank, Security Bank, HSBC among others.
3. How Do Personal Loans Work?
To get a money loan either from a bank or non-bank lender, you need to have met some requirements including a demonstration that you can repay the loan. The application process is normally done online where the borrower provides personal details and documentation which in the case of personal loans is minimal. Once approved, the borrower will be advanced the eligible amount which is expected to be paid within the stipulated period; which can be in monthly installments.
4. How Much Personal Loan Can I Borrow?
While the amount of personal loan you can borrow depends on several factors such as the lender, credit history, and personal income among others, a personal loan Philippines range from a minimum of 500PHP and a high of 2,000,000 PHP. Regardless of your eligibility the most important thing when it comes to a personal loan is ensuring that you only borrow what you can afford to pay back.
5. Which are the cheapest personal loans?
If you are to get the best rates you need to compare online personal loan portfolios. You will find that bank loan interest rates Philippines are slightly different from online lenders. However, the differences may be compensated by other factors. Some of the lowest personal loan interest rates per day include DiGiDo (1%), MoneyCat (0.54%), Kviku (0.16%), UnaCash (0.3%), and Online loans Pilipinas (1%).
6. How Do You Ensure The Loan Lender Is Legit?
With the increased number of platforms lending money in the Philippines, borrowers need to be on the lookout for those that may not be genuine. To ensure that you are dealing with a legit loan lender, ensure that the entity is licensed and registered by the regulatory bodies. Any entity that asks you to pay before applying for a loan should also be avoided at all costs. Check the website to ensure that they are secure as some are out to collect or steal personal information.
