Are you looking for loans in the Philippines that you can avail for the first time? Did you know that there are different kinds of loans that you can consider depending on your needs? Don’t be confused and get caught! Before finally deciding where to avail, here are five types of loans in the Philippines that you should know first to ensure that you’re making the right decision!
1. Personal Loan
As defined, a personal loan is a process of you formally borrowing money from a lender to fund your own needs or expenses. Whether you need money on education, medical emergencies, weddings, or having a vacation or travel, you can maximize a personal loan. There are two common types of a personal loan based on collateral:
- The secured personal loan – Secured loans require putting up collateral. You can use your property, vehicle, or even deposit account that will serve as security for the bank. If you’re not able to pay, your lender can take the collateral to cover the unpaid amount.
- Unsecured personal loan – On the other hand, an unsecured personal loan doesn’t require collateral. Most personal loans in the Philippines are unsecured, letting you borrow from 10,000 to 1 Million pesos. And how will they assess if you’re capable if it’s unsecured? That’s through your credit score or history!
You can apply for personal loans from different entities like:
- Banks – Asia United Bank, Bank of the Philippine Islands (BPI), Banco de Oro (BDO), Chinabank, Eastwest, Maybank, RCBC, Robinsons Bank, Security Bank, and many more.
- Government agencies like SSS and Pag-IBIG
2. Quick Cash Loan
Just like personal loans, cash loans can also help you with your personal emergencies which is more unexpected like losing a job, unanticipated bills, medical emergencies, house repair due to calamities or natural disaster, or unexpected car breakdown or accident.
But don’t confuse it with a personal loan because there are differences between the two.
In terms of eligibility requirements, both require screening, but a quick cash loan has a shorter process and can get you approved in minutes or within the day only. That’s why it can be a good option if you need the cash right away! Meanwhile, personal loans can be processed within days or weeks.
Quick cash loans don’t require any collateral. Instead, they only depend on your credit history or credit score. That’s why you need to be a responsible borrower and have a good credit standing as always!
Since there’s no collateral at all, cash loans have higher interest rates and shorter payment terms. You can usually pay within a maximum of 30 days only while 6 to 48 months for a personal loan.
There are several quick cash loans in the Philippines, also including us at Pahiram where you can get the lowest interest rate within 5 minutes application only. Just go to our homepage or talk to one of our advisors to know more of the offers.
3. Home and Car Loan
If you’re a newlywed, couple, or a breadwinner looking for a new car or home for your family, you can always have it without breaking your bank.
Below are several entities that you can choose for your home loan:
- Social Security System (SSS). When we hear SSS, usually the first thing that comes into our mind is pension or personal loan. Did you know that you can also avail housing loan from SSS? Here are several programs that you can maximize:
- Direct Housing Loan Facility for Workers’ Organization Members – You can avail this loan if you’re a loyal member of Workers’ Organization Members (WOMs). WOM refers to any association of workers in the private sector duly registered with the DOLE, Securities and Exchange Commission (SEC) or Cooperative Development Authority-registered association of workers in the private sector. It includes any trade union center, federation, national union, local/chapter or independent union as defined in Book V of the Labor Code.
- Direct Housing Loan Facility for OFWs – If you’re an OFW who is currently deployed with contract via POEA or by the Embassy abroad or with employment contracts but still waiting for renewal/ deployment, this program is for you! You can also get this whether you’re a Filipino national but already a citizen/ immigrant of foreign countries or, if you’re a long-term resident overseas Filipinos and still wants to avail a home here in the Philippines either for yourself or for your family member.
- House Repair/ Improvement Loan – Now you think that your current home needs major renovation? Or maybe having an extension, a fence or a gate? SSS can also help you! You can apply for this loan directly to SSS or through its participating financial institutions (PFIs) like Philippine Veterans Bank, Landbank, Planters Development Bank, and Valiant Rural Bank- Iloilo.
- Assumption of Mortgage – this allows an SSS member in good standing to assume the updated principal balance of an existing SSS loan.
If you want to know more about the process, requirements, and other loan details, you can always visit the SSS website.
- Pag-IBIG Fund – Being the most popular in terms of housing loan, well I guess you already have an idea about Pag-IBIG or Housing Development Mutual Fund. With Pag-IBIG, you can get up to maximum 6 Million loanable amount via retail or direct fund application or assistance of your property broker or developer.
- Social Housing Finance Corporation (SHFC) – This program is specifically designed for low-income families and informal settlers. This works with secondary markets like LGU’s to help those with lower income acquire their own home.
- Bank Loans – Aside from government agencies, you can also avail home loans on different banks locally like:
- Security Bank
- RBCB and many more
Aside from having a home, another thing every Filipino would like to own is a car. The minimum eligibility of availing a car loan is you should be a Filipino between 21-65 years old, with a monthly income of at least 30,000 and has proof of income (usually a minimum of 2 years in the company).
Here are several car loan types that you can choose from:
- Bank Car Loan – If you’re looking for the easiest and lower interest rate, you can apply through a bank. Since banks have many branches in the country and you can also apply online. Most bank loans are payable up to 6 years. Just make sure that you have a good credit score!
- Dealership Loan – You can also apply directly to your dealer or where you’re buying the car. Dealers are connected with many lenders that can help you get approved faster.
- Through Cooperatives or Credit Union – Credit unions and cooperatives have competitive rates than the bank. However, you still need to be a member. Unlike on banks, your credit score is not significant here. So whether you have low or failing credit scores, you can still be approved.
- Personal Lease – In car leasing, the situation will be a bit different. The lender will buy the car, named to him and let it lease to you. And your lender will sustain all the maintenance and needs. Once the lease period expires, you can now return refinance or buy the car to your lender and pay the remaining amount.
4. Business Loan
Do you have an existing business that you want to grow, or are you planning to put up a business? Then, you can also apply for a business loan. Below are the basic types of business loans:
- Term Loan – A term loan is a loan with a specific amount with either fixed or floating interest rate in a specified payment schedule. If you want to keep your fund intact while funding your business needs in short or long-term, this option is right for you. You can use it if you want to purchase new equipment and increase your production, for construction or renovation purposes, addition of office, warhouse and other properties, or just by adding working capital.
You can pay a short-term loan in one year only while up to 15 years for long-term loans depending on your lender with the loanable amount of 100,000 to 20 Million pesos.
You can apply term loan on:
- BDO SME Loan
- BPI Family Ka-Negosyo Loan
- Metrobank SME Term Loan
- OWWA Loan (for OFWs)
- PSBank SME Term Loan with Prime Rebate
- SSS Business development Loan Facility
- SSS Asenso
- Credit Line – A credit line is similar to having a credit card. You can apply for a certain revolving amount that adds to your business capital. The difference with term loan is that you’ll only be paying the interest on the specific amount that you have only used.
A credit line is usually renewable on an annual basis and from 500,000 to 20 Million pesos.
You can apply credit line on:
- BDO SME Ready Check
- BPI Family Ka-Negosyo Loan
- Metrobank SME Credit Line
- PSbank SME Business Credit Line
- Secured Business Loan – Secured business loan, on the other hand, requires collateral such as real estates like residential or commercial property, bank deposits, or investments. Secured loans have lower interest and longer payment method than unsecured loans.
You can apply for a secured loan on:
- BDO SME Loan
- BPI Family Ka-Negosyo Loan
- Metrobank SME Business Loans
- OWWA Loan (for OFWs)
- PSBank SME Loan
- Security Bank SME Business Mortgage Loan
- SSS Business Development Loan Facility/ SSS Asenso
- Unsecured Business Loan – On the other hand, unsecured business loan dont require any collateral. Application process basis is your credit score or history only. The unsecured business loan has higher interest rates and with the lower loanable amount.
You can apply for unsecured loan on BPI Family Ka-Negosyo Franchising Loan and Security Bank SME Business Express Loan.
5. Government Loan
Heard your officemates about the loans they want to process in HR? Yes, you heard it right! You can also avail government loans for your emergency needs. Here are your options:
- SSS Loan – This is the most common government loan every Filipino can avail as long as you’re employed, currently contributing self-employed, or voluntary member. You should have at least 12 consecutive months posted a contribution, must be under 65 years old and has not been disqualified due to fraud committed against the SSS.
You can apply for SSS loan online or by submitting the requirements on your nearest branch. If you’re an OFW, you can send on SSS Foreign Representative Offices.
As discussed in number 3, you can also avail housing loan through SSS.
- Pag-IBIG Loan – Aside on housing loan, you can also avail Multi-purpose Loan (MPL) and calamity loan through Pag-IBIG as long as you have at least 24 months worth of total contribution or at least 4,800 pesos savings, and you have at least one membership savings within the last six months prior loan application.
- GSIS Loan – GSIS is dedicated to all government employees. There are three types of loans GSIS offers:
- The Consolidated Loan – this is a combined five loan products into one – the Salary Loan, Restructed Salary Loan, Enhanced Salary Loan, Emergency Loan Assistance, and Summer One-Month Salary Loan.
- Policy Loan – this is a loan program wherein a member may avail from his/her GSIS life insurance policy. It has 8% interest, and you can pay it through monthly amortization or deduction on your policy contract.
- Emergency Loan – while emergency loan is provided to members affected by calamities. It’s payable within 36 months with a 6% interest rate per anum.
Ready to Get a Loan?
Now that you already know the basic loans in the Philippines, you can now decide what and where to borrow money may it be for your personal, home, or business needs! Take note that all the lists may vary or change depending on the organization.
But before finally deciding, don’t forget to get at least 2 to 3 options and compare based on the factors that you’re considering like interest rate, the stability of your lender, and flexibility or payment terms.
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