If you have short-term money needs, a personal loan can be the answer. With no collateral needed, you can easily apply for a personal loan at any bank in the Philippines. To learn more about the basics of personal loans, we've compiled this FAQ for your convenience.

True to its name, a personal loan is a loan for any personal expense. Unlike a housing loan or a car loan, you can use a personal cash loan for anything you want, be it tuition fees, travel, or anything else.

There are two types of personal loans available: secured and unsecured. A secured personal loan requires collateral, such as a house or car, to back the loan. For unsecured personal loans, you don't need to put up any kind of collateral. Unsecured personal loans are much more common in the Philippines, though secured loans are also available.

When you take out a personal loan in the Philippines, you enter into an agreement with the lender (usually a bank) and promise to repay your loan over an agreed length of time (also known as the loan tenure or loan tenor). If you're taking out a secured loan, you will also need to put up a collateral.

To repay your personal loan, you make monthly payments for the loan tenure until you've fully repaid both the principal of the loan and the interest. During the early years of the loan, the majority of your monthly payments will be used to repay interest, however, as time passes, a larger proportion of your payments will go into paying down the principal.

Rates vary from bank to bank. For example, a Security Bank personal loan has an effective interest rate of 29.48%, while another personal loan has an effective interest rate of 26.62%.

Most personal loans from banks in the Philippines offer attractive interest rates for their personal loans. While standard monthly interest rates are around 1.5% to 2%, you can get lower deals for more specific types of personal loans like OFW loans or personal loan for business expansion. Depending on the specifications of your needs, you avail the lowest rates on personal loans from these banks.

The best bank for your personal loan needs will vary according to your qualification and/or your preference. There are banks who offer low interest rates but their payment terms may not be as attractive. Meanwhile, you may get a loan with better tenure but a less appealing interest rate. Quick loans from non-traditional lending companies will grant loans with less paperwork but their interest rate may be a lot more than what banks offer. Depending on what you value most, you'll get the best deals for every category from different loan providers.

You can borrow loan amounts as much as ₱2,000,000 when you apply for a personal loan from a bank, though it will still be subject for evaluation and may or may not be approved based on your capacity to pay. Meanwhile, private lenders on the average mostly offer from ₱10,000 to ₱200,000. Private lenders, unlike banks, don't usually have a standard maximum loan amount. However, many of them do base their approved loan amount on the borrower's income.

For your reference, below are the different personal loan providers and the maximum amount of loans they offer.

What Is The Best Place To Get A Personal Loan?

There is a type of personal loan for every financial need. To get the most out of what banks and private lending companies have to offer, applying for a specific personal loan that's appropriate for your needs (starting a business, home renovation, etc) and/or branded for your profession (Doctors loan). This will give you more flexibility to pay back the amount you've borrowed.

As a general rule of thumb, you must submit the complete documents required by the bank or loan provider. Even a single missing requirement such as a valid ID or an incomplete form will take out a day or two from the loan application verification, thus delaying the disbursement of your loan further.

Loan Terms

Collateral:
This refers to the asset the borrower pledges to a given lender in order to secure a loan and this will be impounded by the lender in case of default in payment of the loan.

Early settlement penalties:
The fees that the borrower will have to pay in the event that he/she settles the loan at an earlier date from the one specified on the loan agreement. This is usually estimated as a percentage of the initial loan amount.

Guarantor:
This is a person who agrees to be liable for the payment of a loan in the event that the borrower will be unable to pay for it on time.

Late Payment Charges:
This is the fee which the bank will charge you in the event of non-payment of your loan on the agreed time schedule. For example, for SB Finance personal loans, late payments are charged 3% a month.

Loan/Financing Tenure:
This refers to the time period for a certain loan. At the end of the loan tenure, the borrower is supposed to have cleared the loan taken.

About Loan Application

1. When I make a loan application via Junrix E-Services, do I have to take a higher loan amount and does part of my loan get deducted as commission to Junrix E-Services?

No, all services on Junrix E-Services are FREE because we are self-financed via other means of revenue generation. Your loan application through Junrix E-Services would be identical in every way to if you were to take a loan directly with the bank.

2. Can I extend the duration of my personal loan to more than X number of years?

In Philippines, loan periods differ depending on factors such as financial standing of the applicant as well as the choice of bank and banking product. At Junrix E-Services, we operate only within the policies set up by the banks, and are not authorised to extend or shorten loan periods beyond the dictated terms.

3. Does Junrix E-Services influence the interest rate of my loan?

Just like loan period, we operate only within the policies set up by the banks. As such, all interest rates displayed on www.junrix.com shall be considered final unless a different agreement is struck between you and the bank at a latter date.

4. What if I had already applied for a loan and was rejected? Will my application be accepted through iMoney?

In Philippines, your ability to secure a loan is affected by your credit ratings with the banks as well as your financial state as indicated in financial data systems such as CICC. Whilst you are welcomed to submit enquiries and applications through Junrix E-Services any time, it is recommended that you proceed to check your ratings with your bank if you've experienced several cases of rejected applications.

5. In the event of rejected application, what is the recommended waiting period before I can apply for a loan again?

Generally, we recommend a waiting period of six months before you attempt to apply for a loan with the same bank again. However, you might wish to consider applying for a loan with another bank with terms that match your financial standing. Meantime, we also advise that you clear out any outstanding financial status that might be hindering your chances of getting a loan. For more information, please check with your bank.

6. What is the minimum age to be able to apply for a loan ?

Different banks have different terms but generally, the minimum age to be eligible for a loan is 21 years of age in Philippines. For the latest terms and information, please proceed to our Personal Loan pages.

7. Can I apply for a loan if I have just started working for a month?

To maximise your chance of approval, you are advised to have at least three documented salary payslips (i.e. 2 years in the workforce) before you apply for a loan.