Which is better between Finance Charge and BPI SIP Loan?

To be a credit card holder, it is advantageous to know how to maximize its uses. This includes getting the best deals while also building a good credit score. BPI is one of the top credit card issuers in the Philippines. If you have a BPI credit card, it is important to be aware of the potential charges that may apply, such as finance charges, cash advances, BPI SIP loans ,which is better between finance charge and BPI SIP loans and other bank fees.

Which is better Finance Charge or SIP Loan?

I came across a Reddit post about BPI credit cards while browsing the website. The poster shared that whenever they are unable to pay their balance in full, such as during the Christmas season, they convert it to BPI SIP loans. I was curious as to why they would need to convert it, so I decided to search for more information. The poster explained that this method helps them save on finance charges.

This brought up another question in my mind: is it truly possible to save on finance charges through this method?

BPI Credit Card Calculator

I created a calculator based on the information provided on a BPI billing statement. My goal was to compare the interest and finance charges for BPI’s SIP loan using an Excel spreadsheet. In the process, I also included calculations for cash advances, personal loans, and car loans in the same Excel file.

Finance Charge vs. SIP Loan

After developing the calculator, I discovered that converting a retail purchase to a SIP loan can lead to savings in certain cases. However, there are scenarios where opting for a finance charge is more advantageous.

For instance, if you have a retail purchase worth Php 20,000 that you intend to pay for over 12 months, the finance charge would only amount to Php 2,532.14. On the other hand, with a SIP loan, the interest and conversion charge would total Php 2,700. Therefore, for this particular
ar scenario, choosing the finance charge would be more beneficial.

To provide an alternative illustration, let us consider a retail transaction amounting to Php 100,000, payable over a 12-month period.

Under these circumstances, the corresponding finance charge would be Php 12,662.86. However, opting for the BPI SIP loan would result in an interest of only Php 12,300, inclusive of the service fee amounting to Php 300. Thus, it is more advisable to avail of the SIP loan in this particular situation.

Based on the example provided, we can conclude that a finance charge may be a more suitable choice in certain situations. The decision would depend on the size of the retail purchase and the term that you have chosen.


“If your retail purchase is less than Php 50,000 and can be paid within a year, opting for finance charges can be cost-effective. Additionally, it is convenient since you won’t need to contact the BPI hotline for conversion. For purchases that can be paid within 3, 6, or 9 months, choosing finance charges is more favorable, regardless of the amount of your retail purchase.”

Let’s wrap it up!

It took me a long time to understand and replicate the calculations found in BPI billing statements because it is not a common topic, especially since most people pay their bills on time. However, if there ever comes a time when our expenses increase unexpectedly, the BPI Calculator can help us compare interest rates easily.

I want to clarify that I am not suggesting that you take out a SIP loan. It is always better to pay your bills in full. The information I shared is simply for your reference in case you find yourself in a situation where you need it.

Based on the example provided, we can conclude that a finance charge may be a preferable choice in certain situations. This is determined by both the retail purchase amount and the term that is selected.

Similar Posts