Looking for a quick source of fund for your child’s college tuition, starting a business, or a house repair? One of the options for Filipinos who need to meet their immediate cash needs is to get a personal loan from commercial banks.
What is a personal loan?
Personal loans in the Philippines can be used for a wide range of purposes, including education, medical bills, home improvement, travel, or even weddings. When a bank lends you money through a personal loan, you are expected to pay back the amount—along with the interest—in monthly installments, typically from 12 to 36 months.
When looking for the best personal loan for their needs, one of the most important considerations is the interest rate. In fact, majority or 57% of Filipinos consider the interest rate when borrowing money from banks, according to the latest National Baseline Survey on Financial Inclusion of the Bangko Sentral ng Pilipinas.
Getting a loan with the lowest interest rate allows the borrower to save more money, which can be used for other important living expenses.
What are the types of personal loan interest rates?
Before you start your search for low interest personal loans, it is important to be aware first of the difference between the two types of interest rates: effective interest rates (or annual percentage rates) and monthly add-on rates.
Effective interest rates are always higher than add-on rates because they reflect the true cost of borrowing money, which includes the fees charged by banks for processing the loan. It is also computed for the entire year. In contrast, add-on rates apply to the loan amount every month—it is the interest charged on the amount borrowed.
Where to get the best personal loan rates
Here are the top three personal loans in the Philippines with lowest interest rates:
BDO Personal Loan
Monthly add-on rates
Effective interest rates
Loanable amount: Php 20,000 to Php 1 million
BPI Personal Loan
Monthly add-on rate: 1.20% for 12, 18, 24, 30, and 36 monthly installments
Effective interest rates
Loanable amount: Php 10,000 to Php 1 million
Maybank enAble Personal Loan
Monthly add-on rate: 1.30% for 12, 18, 24, and 36 monthly installments
Loanable amount: Php 50,000 to Php 1 million
Having the lowest interest rates alone does not automatically make a personal loan the best one for your needs. To save money and get the most value, you need to compare personal loans in the Philippines based not only on their interest rates but also on their payment terms, loanable amount, and other factors. The key is to strategically find the right personal loan based on your needs and financial capability to pay off the loan.
--Guest Post by Daniel Zoleta, MoneyMax.ph
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| Photo courtesy of Myriams-Fotos via Pixabay |
Personal loans in the Philippines can be used for a wide range of purposes, including education, medical bills, home improvement, travel, or even weddings. When a bank lends you money through a personal loan, you are expected to pay back the amount—along with the interest—in monthly installments, typically from 12 to 36 months.
When looking for the best personal loan for their needs, one of the most important considerations is the interest rate. In fact, majority or 57% of Filipinos consider the interest rate when borrowing money from banks, according to the latest National Baseline Survey on Financial Inclusion of the Bangko Sentral ng Pilipinas.
Getting a loan with the lowest interest rate allows the borrower to save more money, which can be used for other important living expenses.
What are the types of personal loan interest rates?
Before you start your search for low interest personal loans, it is important to be aware first of the difference between the two types of interest rates: effective interest rates (or annual percentage rates) and monthly add-on rates.
Effective interest rates are always higher than add-on rates because they reflect the true cost of borrowing money, which includes the fees charged by banks for processing the loan. It is also computed for the entire year. In contrast, add-on rates apply to the loan amount every month—it is the interest charged on the amount borrowed.
Where to get the best personal loan rates
Here are the top three personal loans in the Philippines with lowest interest rates:
BDO Personal Loan
Monthly add-on rates
- 1.25% for 12, 18, 24, and 36 monthly installments
- 1.30% for 6 monthly installments
Effective interest rates
- 25.98% for 36 monthly installments
- 26.58% for 24 monthly installments
- 26.76% for 18 monthly installments
- 26.63% for 12 monthly installments
- 26.27% for 6 monthly installments
Loanable amount: Php 20,000 to Php 1 million
BPI Personal Loan
Monthly add-on rate: 1.20% for 12, 18, 24, 30, and 36 monthly installments
Effective interest rates
- 25.03% for 36 monthly installments
- 25.33% for 30 monthly installments
- 25.59% for 24 monthly installments
- 25.74% for 18 monthly installments
- 25.60% for 12 monthly installments
Loanable amount: Php 10,000 to Php 1 million
Maybank enAble Personal Loan
Monthly add-on rate: 1.30% for 12, 18, 24, and 36 monthly installments
Loanable amount: Php 50,000 to Php 1 million
Having the lowest interest rates alone does not automatically make a personal loan the best one for your needs. To save money and get the most value, you need to compare personal loans in the Philippines based not only on their interest rates but also on their payment terms, loanable amount, and other factors. The key is to strategically find the right personal loan based on your needs and financial capability to pay off the loan.
--Guest Post by Daniel Zoleta, MoneyMax.ph
