16 Personal Loans with Low Interest Rates in the Philippines for 2023
To kill two birds with one stone in the Philippines, consider taking out a personal loan with a low interest rate. By doing so, you can both fund your expenses and make affordable monthly payments to pay off the loan.
When applying for a loan in the Philippines, most borrowers prioritize the interest rate. According to the latest financial inclusion survey by the Bangko Sentral ng Pilipinas (BSP), interest rate is one of the top considerations among Filipino borrowers. This explains why many Filipinos opt for personal loans with low interest rates.
The best options for low interest personal loans in the Philippines are typically offered by government agencies and banks. Choosing a loan with a low interest rate can help you save money by keeping the interest payments low throughout the loan’s term.
Monthly Add-On vs Effective Interest Rate: What is the Difference?
let’s clarify the distinctions between the two kinds of interest rates offered on personal loans in the Philippines. Most lenders promote two types: the monthly add-on interest rate and the effective interest rate.
The effective interest rate, also known as the annual percentage rate (APR), represents the actual interest that you will pay on a loan.
On the other hand, the monthly add-on interest rate is computed by adding the amount of the loan to the annual interest rate, then multiplying it by the number of years you plan to repay the loan. As a result, this leads to a higher monthly amortization expense for the borrower. When comparing different types of personal loans, look for a lower monthly add-on interest rate.
What are the Banks with the Lowest Interest Rates for Personal Loans in the Philippines?
Are you looking for the best personal loan options in the Philippines? We have compiled a list of the lowest interest rates available, not just from banks, but also from government agencies. Take a look and choose the option that best suits your needs and budget.
1. SSS Salary Loan
- Effective interest rate: 10% per annum (based on diminishing principal balance)
- Loan amounts:
- One-month salary loan – For member-borrowers who have at least 36 months of total contributions and six months of contributions in the last 12 months
- Two-month salary loan – For member-borrowers who have 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: In as fast as 60 seconds[2]
- Loan fees:
- Service fee: 1% of the total loan amount
Late payment penalty of 1%The SSS Salary Loan is a loan provided by the government, which has a fixed low interest rate of 10% per annum. This means that the monthly payments will remain the same throughout the loan term. SSS members who meet the eligibility criteria can borrow up to one or two months’ worth of their monthly salary credit, and repay the loan in 24 monthly installments.Repaying the loan is also hassle-free for employed borrowers as their monthly payments are automatically deducted from their salary. It’s no surprise that the SSS Salary Loan is the preferred option for Filipinos who require short-term cash assistance.
2. Pag-IBIG Multi-Purpose Loan
- Effective 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
The Pag-IBIG Multi-Purpose Loan is another popular personal loan with low interest rates in the Philippines. This loan is quite similar to the SSS Salary Loan and offers a fixed interest rate of 10.5%. Borrowers can easily make monthly repayments through payroll deduction, and the loan can be paid back over 24 to 36 monthly installments.
Pag-IBIG members who meet the eligibility criteria can borrow up to 80% of their total accumulated value (TAV). The TAV is the sum of their monthly contributions to Pag-IBIG, their employer’s contributions, and any dividends earned.
3. HSBC Personal Loan
- 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
- Loan fees:
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- Processing fee: ₱1,500
- Late payment fee: 36% per annum on overdue payment
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Documentary Stamp Tax: 0.75% of the drawn loan amount (deducted from loan proceeds; applies to the loan amount of at least ₱250,000 or for business purposes)Are you trying to find out which bank offers personal loans with the lowest interest rates? Consider HSBC’s cash loans, which have competitive interest rates and are a great option for financing your education or travel expenses. We recommend reading our HSBC Personal Loan guide before submitting your application.
4. CIMB Bank Personal Loan
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
Loan fees:
Documentary Stamp Tax: ₱1.50 per ₱200 of the loan amount
Late payment fee: 5% of the unpaid installment due or ₱300, whichever is higherCIMB provides some of the most competitive interest rates for personal loans in the Philippines. Moreover, CIMB also offers a fully digital personal loan application process for those who prefer to do everything on their mobile devices. By simply accessing the CIMB app, selecting the “I need a personal loan” option, and then hitting “Apply now,” you can supply all the necessary information, upload your requirements, and complete the Virtual Verification process. If your application is approved, you will receive an email containing the contract for your legitimate online loan with a low interest rate.
“Submit your application now for a Metrobank Personal Loan and receive complimentary items as part of the Moneymax Metrobank Personal Loan promotion for successful applicants.”
7. Citibank Personal Loan
- 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
- Loan fees:
- 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
Citibank offers personal loans with the lowest interest rates and a fast approval process within 24 hours. The loan comes with a flexible repayment term of up to five years, the longest in the Philippines. You can borrow up to ₱2 million and choose to repay it in 12, 24, 36, 48, or 60 monthly installments.
It’s worth noting that many people are unaware of the low-interest rates that come with a Citi Personal Loan. To learn more about this type of loan, please refer to our Citi Personal Loan application guide.
Note: This product is sold by Union Bank of the Philippines, using certain trademarks temporarily under license from Citigroup Inc. and related group entities.
You can accomplish your financial objectives, whether it’s starting a new business, going on a vacation, making home improvements, purchasing a car, or paying for tuition, with a personal loan from Citibank.
With Citibank, you can borrow up to ₱2 million, enjoy a low-interest rate, and have up to five years to repay your loan. If you apply for a Citi Personal Loan through Moneymax before April 30, 2023, and subsequently get approved, you’ll receive rewards worth up to ₱10,990! Please refer to the promo terms and conditions for more details.
Please note that Union Bank of the Philippines is the entity selling this product, and they are using certain trademarks under license from Citigroup Inc. and related group entities.
8. RCBC Personal Loan
- Monthly add-on interest rate: 1.3%
- Loan amount: ₱50,000 to ₱1 million
- Loan terms: Six to 36 months
- Processing time: Seven to 21 days
Another loan with the lowest interest rate is from RCBC. It allows you to borrow up to ₱1 million with flexible terms of up to 36 months. The monthly add-on interest rate is 1.3%, and approval may take up to 21 days.
9. Maybank Personal Loan
- 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
- Loan fees:
- 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)
One of the best low-interest personal loans in the Philippines is the Maybank Personal Loan, which offers a 1.3% fixed interest rate. You can also borrow up to ₱1 million, depending on your salary and bank approval.
10. CTBC Bank Personal Loan
- Monthly add-on interest rate: 1.39% to 1.79% across all loan terms
- Effective interest rates: 29.33% to 37.54% depending on the term of the loan
- Loan amount: ₱20,000 to ₱1 million
- Loan terms: 12 to 36 months
CTBC Bank offers a personal loan, also known as a Salary Stretch Loan, which is available to both salaried employees and self-employed individuals. This loan can be used for a variety of purposes such as home improvement, education, balance transfers, business expenses, travel, and more. The interest rates for this loan are among the lowest in the market, with a starting monthly add-on rate of 1.39% and an effective interest rate of 29.48%..
11. EastWest Personal Loan
- Monthly add-on interest rate: 1.49% to 1.89%
- Annual contractual interest rate: Starts at 31.51% for 12 months
- Loan amount: ₱25,000 to ₱2 million
- Loan terms: 12 to 36 months
- Processing time: Five to seven banking days
- Loan fees:
- Processing fee: ₱1,900
- Documentary Stamp Tax: ₱1.50 for every ₱200 if the loan amount is over ₱250,000
- Late payment fee: ₱500 or 8% per month of the outstanding balance, whichever is higher
EastWest Bank is another bank with the lowest interest rate on personal loan products at 1.89% monthly. You can borrow up to ₱2 million to finance your travel, emergency, and educational expenses.
12. PSBank Flexi Personal Loan
- Monthly add-on interest rate: 1.75% for Term Loan; 2.5% monthly interest rate for Revolving Loan
- Effective interest rate:
- 42.88% for 24 months (Term Loan)
- 41.29% for 36 months (Term Loan)
- 34.49% for 12 months (Revolving Loan)
- Loan amount: ₱20,000 to ₱250,000
- Loan terms: 24 or 36 months (for fixed term loans)
- Processing time: Five to nine working days
- Loan fees:
- Handling fee: ₱1,500 or 1% of the approved credit line, whichever is higher
- Credit line renewal fee: ₱1,500
- Collection fee: 15% to 35% of the total outstanding amount in case of default (depending on delinquency age)
If you’re shopping for lower interest loans, check out our article about PSBank Flexi Personal loan for more details. It’s collateral-free, and it’s the only personal loan with a revolving credit line and fixed term. You get an ATM card as well.
On top of that, you also receive rebates under their loan rebate program when you make advance or excess loan payments.
13. SB Finance Personal Loan
- Monthly add-on interest rate: 1.89%
- Annual percentage rate: Starts at 37.53%
- Loan amount: ₱30,000 to ₱2 million
- Loan terms: 12 to 36 months
- Processing time: Within five banking days
- Loan fees:
- Processing fee: ₱2,000
- Notarial fee: ₱300 (for ₱100,000 loan amount and up)
- Pre-termination processing fee: ₱2,000
- Late payment fee: 3% of unpaid amortization
One of the low-interest personal loans in the Philippines is the one from SB Finance, a subsidiary of Security Bank. Loan amounts range from ₱30,000 to ₱2 million, payable in 12, 18, 24, or 36 months. Easily apply online through its website and get your loan approved within a week.
14. PBCom Puhunan Plus
- Interest rate: 2% to 10.5%
- Loan amount: ₱10,000 to ₱150,000
- Loan terms: 14, 28, or 84 days
- Processing time: One to two working days
- Loan fees:
- Late payment fee: Up to 5% of the principal amount
- Service fee: 2% to 10.5%
This cash loan is exclusive to Puregold Tindahan ni Aling Puring members. Members simply need to text their name and address to 0922 110 1030. A PBCOM Account Officer will then get in touch for the next steps. Loans are processed in one to two days only.
15. Tonik Flex Loan
- Monthly interest rate: 2.49%
- Annual percentage rate: 29.99%
- Loan amount: ₱20,000 to ₱250,000
- Loan terms: 6 to 24 months
- Processing time: One working day
Aside from being one of the lowest in the market, the Tonik Flex Loan’s interest rate is also fixed, meaning your monthly payment amount remains the same throughout the term. Since you know how much you’ll be paying every time, you can easily manage your budget.
16. CBS Easi-Funds Personal Loan
- Monthly interest rate: 2.73% to 2.92%
- Loan amount: ₱30,000 to ₱1 million
- Loan terms: 12 to 36 months
- Processing time: Three to five working days
The CBS Easi-Funds Personal Loan interest rates vary depending on your loan term. Use this cash loan, whose amount can range up to ₱1 million, to fund any emergency expenses, home renovations, debt consolidation, and more.
At a Glance: 16 Personal Loans with Low-Interest Rates in the Philippines
For your easy and quick reference, here’s a summary table of low-interest personal loans.
How Will I Get Approved for a Low-Interest Loan?
How to Get a Personal Loan with a Low-Interest Rate in the Philippines
Obtaining a personal loan with a low-interest rate can be beneficial for financing unexpected expenses or ventures, as well as for consolidating debt or financing your child’s education. However, it is important to conduct thorough research and evaluate your financial situation before obtaining one.
To secure a personal loan with a low-interest rate, follow these steps:
Step 1: Crunch the Numbers
It is crucial to avoid taking out a loan that you cannot afford. Therefore, determine the amount of cash you require after deducting loan fees. Then, calculate the monthly payment amount and ensure that it is affordable and does not strain your budget.
Step 2: Compare Loan Products
To secure the lowest possible loan interest rate in the Philippines, do not settle for the first offer you receive. Instead, scour the internet for the best deals available in the market.
You can obtain a low-interest personal loan from banks, government agencies, and other lending institutions. The decision is ultimately up to you.
When selecting where to borrow money from, consider the following factors
- Loan amount
- Loan term
- Monthly interest rate
- Loan fees
- Requirements
Step 3: Prepare the Requirements
after shortlisting your options, ensure that you review the loan prerequisites set forth by the bank or financial institution. Certain lenders mandate a minimum yearly income to be eligible for a personal loan, and you might also need to meet specific documentation criteria that prove your identity and income source.
Subsequently, organize all the required documents promptly. This will accelerate the loan application process and prevent you from having to make multiple visits to the lender’s office to submit your paperwork, saving you from any associated stress and inconvenience.
Step 4: Read the Fine Print
Ensure that you go through the terms and conditions of your personal loan carefully. This document contains crucial information about your loan, which could potentially help you save thousands of pesos over time. If you have any additional queries or doubts, don’t hesitate to approach your lender for clarification.
Step 5: Apply for the Loan and Get Ready for Repayments
Once you have selected the most suitable option for your requirements, the next step is to submit an application for a personal loan in the Philippines. It is important to gather all the necessary documents and confirm your eligibility before proceeding.
Additionally, it is crucial to establish a repayment plan for the loan. You should adjust your budget to allow for the monthly payment and ensure that you are not exceeding 30% of your monthly income on debt payments. This 30% guideline is regarded as a favorable debt-to-income ratio.
Final Thoughts
Although banks and government agencies are commonly associated with rigorous personal loan prerequisites, they still provide low-interest personal loans in the Philippines to accommodate diverse financial requirements. By exhibiting sound financial habits and preserving a favorable credit history, obtaining low interest rates is feasible, and this can ultimately result in cost savings on interest payments.
Sources:
- [1] 2021 BSP Financial Inclusion Survey
- [2] SSS promises salary loan approval in ’60 seconds + 5 clicks’ (Manila Bulletin, 2022)
- [3] What Constitutes a Good Debt-to-Income (DTI) Ratio? (Investopedia, 2022)
