In the most recent financial inclusion survey conducted by the Bangko Sentral ng Pilipinas (BSP), it was revealed that the interest rate stands as a pivotal factor in the decision-making process for Filipino borrowers. Consequently, many opt for personal loans with low-interest rates.
Securing a personal loan with a low interest rate in the Philippines serves a dual purpose. Not only does it provide the necessary funds for your requirements, but it also ensures manageable monthly payments, making it an advantageous choice.
Typically, the most favorable personal loan options featuring low-interest rates in the Philippines are offered by esteemed government agencies and reputable banks. These loans prove to be financially prudent, allowing borrowers to save considerably by maintaining minimal interest payments throughout the loan's term.
For other type of loans, visit my detailed guide for best housing loans and car loans in the Philippines!
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What are the Banks or Financial Institutions that Offer the Lowest Interest Rates for Personal Loans in the Philippines?
Curious about the institutions providing the most affordable personal loans in the Philippines? We've compiled a list of the lowest interest rates available, not only from banks but also from government agencies. Select the personal loan that aligns with your requirements and financial plan.
Also check my list of 10 Best Quick Cash Loans in the Philippines
1. SSS Salary Loan
The SSS Salary Loan is a government-backed loan with a fixed low interest rate of 10% per year. Members meeting the specified contribution criteria can borrow one or two months' worth of their monthly salary credit, repaid over 24 monthly installments. Loan repayment is hassle-free for employed borrowers, as the monthly amortization is automatically deducted from their salary, making it a preferred choice for short-term financial needs.
Interest Rate: 10% per annum (based on diminishing principal balance)
- One-month salary loan: Members with at least 36 months of total contributions and six months of contributions in the last 12 months.
- Two-month salary loan: Members with at least 72 months of total contributions and six months of contributions in the last 12 months.
Loan Terms: Up to 24 months
Processing Time: As fast as 60 seconds
- Service Fee: 1% of the total loan amount
- Late Payment Penalty: 1%
2. Pag-IBIG Multi-Purpose Loan
The Pag-IBIG Multi-Purpose Loan offers a low fixed rate of 10.5% and allows for monthly repayment through payroll deduction. Borrowers can qualify for a loan amount of up to 80% of their total accumulated value (TAV), which includes all Pag-IBIG contributions, employers' share of contributions, and total dividends earned.
Interest Rate: 10.5% per annum
Loan Amount: Up to 80% of the borrower's regular Pag-IBIG savings
Loan Terms: 24 to 36 months
Processing Time: As fast as two days
3. HSBC Personal Loan
HSBC offers competitive personal loans with a monthly add-on interest rate as low as 0.65%. Borrowers can access amounts ranging from ₱30,000 to ₱500,000, catering to various needs such as travel or education expenses. With quick processing and reasonable terms, HSBC's personal loans are a favorable choice for those seeking financial flexibility.
Monthly Add-on Interest Rate: As low as 0.65%
Effective Interest Rate: 14.29% for 24 months
Loan Amount: ₱30,000 to ₱500,000
Loan Terms: Six to 36 months
Processing Time: Up to five working days
- Processing Fee: ₱1,500
- Late Payment Fee: 36% per annum on overdue payment
- Documentary Stamp Tax: 0.75% of the drawn loan amount (applies to loans of at least ₱250,000 or for business purposes)
4. CIMB Bank Personal Loan
CIMB Bank offers a hassle-free digital loan application process. Borrowers can enjoy low-interest rates and swift loan approval and disbursement.
Monthly add-on interest rate: 1.12% to 1.95%
Annual contractual rate: 24%, 30%, or 36%
Loan amount: ₱30,000 to ₱1 million
Loan terms: 12 to 60 months
Processing time: Loan application in just 10 minutes, approval in 24 hours, and disbursement in one to two banking days
- Documentary Stamp Tax: ₱1.50 per ₱200 of the loan amount
- Late payment fee: 5% of the unpaid installment due or ₱300, whichever is higher
5. BPI Personal Loan
BPI offers affordable personal loans with fixed monthly installments. Borrowers can secure loans ranging from ₱20,000 to ₱2 million, making it a suitable option for various financial needs.
Monthly add-on interest rate: 1.2%
Annual contractual rate: 25.60%
Loan amount: ₱20,000 to ₱2 million
Loan terms: 12 to 36 months
Processing time: Five to seven working days
- Processing fee: ₱1,500 (one-time; deducted from loan proceeds)
- Documentary stamp tax: ₱1.50 per ₱200 of the loan amount (for BPI personal loans above ₱250,000 or for business purposes)
6. Metrobank Personal Loan
Metrobank provides flexible loan options with competitive interest rates. Borrowers can access up to ₱1 million, making it a convenient choice for those seeking moderate loan amounts.
Monthly add-on interest rate: 1.25% to 1.75%
Annual contractual rate: 25.976% to 36.742%
Loan amount: ₱20,000 to ₱1 million
Loan terms: 12 to 36 months
Processing time: Seven working days
- Disbursement fee: ₱1,500
- Late payment fee: ₱850 per incidence
- Pre-termination fee: 5% of the outstanding balance or ₱550, whichever is higher
7. UnionBank Personal Loan
UnionBank offers long-term repayment options and quick loan processing. Borrowers can avail loans up to ₱2 million with minimal hassle and swift approval.
Monthly add-on interest rate: 1.29%
Annual contractual rate: 26.9%
Loan amount: Up to ₱2 million
Loan terms: 12 to 60 months
Processing time: As fast as 24 hours
- Disbursement fee: ₱1,750 including stamp duty
- Closure handling fee: 4% of the unbilled principal component of the loan that is prepaid
- Late payment fee: ₱500 or 6% of the overdue amount, whichever is higher
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8. Maybank Personal Loan
Maybank provides a fixed interest rate and substantial loan amounts. Borrowers can secure loans based on their salary, making it suitable for financing significant expenses.
Monthly add-on interest rate: 1.3%
Loan amount: ₱50,000 to ₱1 million
Loan terms: 12 to 36 months
Processing time: Five to 10 working days
- Processing fee: ₱2,000 to ₱3,000
- Documentary stamp of ₱1.50 for every ₱200 if the loan amount is over ₱250,000
- Credit Life Insurance (amount depends on age and loan maturity)
9. RCBC Personal Loan
RCBC offers flexible terms and straightforward loan processing. Borrowers can enjoy low-interest rates and repayment schedules tailored to their financial capabilities.
Interest Rate: 1.3% (Monthly Add-On)
Loan Amount: ₱50,000 to ₱1 million
Loan Terms: 6 to 36 months
Processing Time: Up to 7 days
10. Tonik Flex Loan
Tonik Flex Loan offers a fixed interest rate for predictable monthly payments. Borrowers can manage their budget effectively with a consistent payment amount throughout the loan term.
Interest Rate: As low as 1.7% (Monthly Add-On)
Loan Amount: ₱20,000 to ₱250,000
Loan Terms: 6 to 24 months
Processing Time: 1 working day
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How Do I Get Approved for a Low-Interest Loan?
So, you've come across a personal loan in the Philippines with an attractive low-interest rate. But, the crucial question remains: will your application actually get approved?
Finding a lender offering a low-interest personal loan in the Philippines is just the first step. In reality, not everyone qualifies for these favorable rates, especially when dealing with banks that conduct stringent credit checks to assess a borrower's repayment capacity, focusing primarily on the applicant's credit score.
Having a high credit score significantly enhances your chances of securing a low-interest personal loan. However, if your credit score is less than stellar, you might end up with a higher interest rate, or in the worst-case scenario, your application might get rejected altogether.
That's why it's paramount to be aware of your credit score. If you have a good credit history, you can negotiate with the bank for a reduced interest rate. Conversely, if your credit score is less than ideal, it's essential to take proactive steps to improve it before applying for a personal loan.
Also check out the 5 Credit Cards with No Annual Fees in the Philippines