• Personal Loan Interest Rates

    Personal Loans have been redefining the world of credit in the past decade or so. A loan that comes with no strings attached and can be availed for a massive range of requirements that need financial support for fulfillment. Nearly all indigenous and multinational banks in the Philippines offer Personal loans to Filipinos with a stable source of income. Compared to loans of similar functioning, a Personal loan is far more cost effective for the borrower as it comes at competitive interest charges along with minimal fees. This article deals with the most prominent aspect of availing a loan, the foremost determinant of your decision of availing a particular loan,the Interest Rate.

    Interest Rate For Personal Loans in the Philippines

    Monies that you borrow from the bank are billed interest, a percentage of the principal amount computed either on a fixed or floating basis and added to the monthly repayment after breaking it down on the basis of the term(tenor). Based on the various input factors such as the principal amount, tenor and other determinants, the impact of interest charges varies. The thumb rule is, lesser the rate and tenor, lower is the overall charges billed.

    In the Philippines, Personal Loans are offered either on a Fixed Interest Rate or Variable Interest Rate basis. In the former option, the rate is even and stays intact throughout the loan term whereas it may fluctuate on the basis of pre agreed terms during the loan tenor. Most of the loans disbursed under the PL category in the country are on fixed interest rate basis. In the next section, let's take a sneak peak into the factors that affect interest rates.

    Determinants That Affect Personal Loan Interest Rate

    Bank & Its Loan Offer

    Though all banks aim at providing the most “Competitive” rates, not all of them can be weighed on the same scale. Depending on the bank and prevailing rates, the interest charges varies for Personal Loans.

    Market Conditions and Govt. Regulations

    The current economic scenario, regulations from the central bank(BSP) have an important say in determining the outcome since rates published by the borrowers are indexed to the external factors.

    Loan Amount

    The quantum of loan has a significant say in determining the rate of interest. If the loan amount is substantially higher as per bank standards, you may be offered a rate lower than the published rates or vice versa.

    Loan Tenor

    The borrower is flexible to choose a loan tenor of their choice. Though a low tenor means lesser burden for you in terms of the interest charges, selecting a bigger term is rewarded by banks with a significantly lower rate of interest.

    Credit History

    Perhaps, the only factor that digs into your past credit. Banks and financial institutions rely heavily upon credit reports provided by external agencies and also systems maintained internally to assess the creditworthiness of the applicant. If you’ve a sound track record, be assured of being offered the most competitive interest rate for the personal loan.

    Promos & Offers

    Ongoing promos and offers, specially during festive seasons can make you eligible for a lower rate of interest for personal loans. Some of the most visible fees such as processing charges can also be waived during the promo period. The details are generally available on the web portal of the bank.

    How To Get Lower Rate of Interest on Personal Loan in the Philippines

    Having Sound Credit History

    Having a good credit performance in the past does wonders when you apply for a personal loan in the Philippines. Previous cases of defaults or late payments may go against you when your application is processed and therefore you may be offered a loan on a higher rate of interest. If you’ve not availed a loan/credit card in the past, you may be required to provide a collateral to secure the loan amount.

    By Means of Negotiation

    Its very important to negotiate either during the time of application or after the loan is approved. Banks do maintain a lower limit, paving way for negotiations on the base rate of interest. Do ensure you maintain contact with a single representative and negotiate until you think the best is being offered to suit your budget.

    Compare Online

    The most sensible thing to do before applying is to compare personal loan products offered by various banks and financial institutions. This task not only ensures that you’re well informed about the loan offers from various banks, but also get detailed information on the interest rates offered by the lenders. This way, you can make a list of banks you would like to apply with on the basis of suitable terms and rates.

    Leading Banks Offering Personal Loan in the Philippines

    • BDO Personal Loan
    • Eastwest Bank Personal Loan
    • Planters Bank Personal Loan
    • RCBC Personal Loan
    • Robinsons Bank Personal Loan
    • BPI Personal Loan
    • Citibank Personal Loan
    • China Bank Savings Personal Loan
    • HSBC Personal Loan
    • Maybank Personal Loan
    • Standard Chartered Personal Loan
    • PBCOM Personal Loan
    • PSBank Personal Loan
    • Security Bank Personal Loan
    • Sterling Bank of Asia Personal Loan
    • UCPB Personal Loan

    Personal Loan Interest Rates - Bank Wise

    1. BPI Personal Loan
    2. At present, the bank is offering a promotional rate of 0.98% per month until December 21, 2015. The table below gives you details of the actual rate rate of interest for various tenor options.

      Loan Tenor Promotional Rate Standard Rate
      12 months 21.04% 25.60%
      18 months 21.23% 25.74%
      24 months 21.16% 25.59%
      30 months 21.01% 25.33%
      36 months 20.81% 25.03%
    3. BDO Unibank Personal Loan
    4. The bank provides a clean split of the EIR(Effective Interest Rate), a combination of Factor Rate and Actual Rate of Interest(Add on basis) to calculate the interest charges billed on the principal amount. Refer to the table below for further information.

      Loan Tenor Monthly Rate Factor Rate Effective Rate of Interest(Per Annum)
      6 months 1.30% 0.179667192 26.27
      12 months 1.25% 0.095836960 26.63
      18 months 1.25% 0.068058532 26.76
      24 months 1.25% 0.054167533 26.58
      36 months 1.25% 0.040279967 25.98
    5. Security Bank Personal Loan
    6. This bank has a simple way of calculating the applicable interest rate which is done on the basis of Monthly Add-On Rate. In addition to the interest charges, the applicant is also required to an upfront Processing fee deductible from the loan amount before disbursal.

      Loan Tenor Interest Rate(Monthly Add on)
      12 months 1.39%
      18 months 1.49%
      24 months 1.59%
      36 months 1.69%
    7. East West Bank Personal Loan
    8. Similar to other banks in its category, the bank uses a mix of Factor Rate and Add On rate depicted on a monthly basis to apply interest rates(Effective Interest Rate) on loan disbursals.

      Refer to the table below for detailed information.

      Loan Tenor Monthly Rate Factor Rate Effective Rate of Interest(Per Annum)
      12 months 1.49% 0.0982333 31.51%
      18 months 1.59% 0.0714556 33.54%
      24 months 1.59% 0.0575667 33.19%
      36 months 1.69% 0.0446778 34.01%

    The rates above are subject to change periodically based on monetary decisions of the bank or on the basis of promo offers. Do inquire with bank officials for details of latest interest rates on Personal Loans. Make sure to also compare other fees and charges since they tend to add substantial cost to the overall expenses incurred in procuring the loan.

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