15 Personal Loans With Low Interest Rates in the Philippines for 2024

In the ever-evolving landscape of personal finance, Filipinos often find themselves in need of financial assistance to fulfill their goals, address emergencies, or consolidate debts. The ability to secure a personal loan with a low-interest rate is a vital aspect of financial well-being.

In the Philippines, this has been a topic of paramount importance, as interest rates significantly affect borrowers’ financial stability. According to the latest survey conducted by the Bangko Sentral ng Pilipinas (BSP) on financial inclusion, interest rates are a primary concern for Filipino borrowers. This underscores the significance of seeking personal loans with low-interest rates, as it can greatly influence an individual’s financial health.

Why Low-Interest Personal Loans Matter

Low-interest personal loans offer a myriad of benefits, making them a preferred choice for individuals seeking financial assistance. When opting for a personal loan with a low interest rate in the Philippines, borrowers essentially accomplish two key objectives. First and foremost, they acquire the funds they need to fulfill various financial objectives, such as home improvements, education expenses, debt consolidation, or even leisurely pursuits like travel. Secondly, and equally important, is the ability to repay the loan through manageable monthly installments. This allows borrowers to avoid the financial burden associated with high-interest loans, ultimately leading to improved financial well-being.

The Philippine financial landscape offers several options for securing personal loans, but the most attractive ones typically come from government agencies and reputable banks. These loans are designed to keep interest payments at a minimum throughout the loan’s duration.

Monthly Add-On vs. Effective Interest Rate: Understanding the Difference

Before diving into the details of the best personal loans with low-interest rates in the Philippines for 2023, it’s crucial to clarify the distinction between two commonly used types of interest rates for personal loans: the monthly add-on interest rate and the effective interest rate.

• Effective Interest Rate (Annual Percentage Rate – APR): This rate reflects the true interest cost paid by borrowers over the entire loan period. It considers compounding, making it an accurate measure of the cost of borrowing. When comparing loan offers, focusing on the effective interest rate provides a clear picture of the actual financial commitment.
• Monthly Add-On Interest Rate: In contrast, the monthly add-on interest rate is calculated by combining the loan amount with the annual interest rate. This total is then multiplied by the number of years for loan repayment. While this method appears straightforward, it often results in higher monthly amortization costs for borrowers. Therefore, when searching for different types of personal loans, it is advisable to look for a lower monthly add-on interest rate.

Exploring the Best Personal Loans with Low-Interest Rates in the Philippines

Now that we have a clear understanding of the key concepts related to personal loan interest rates, let’s delve into the best personal loan options available in the Philippines in 2023. These loans have been selected based on their competitive interest rates and favorable terms, making them ideal choices for borrowers seeking affordable financial solutions.

1. SSS Salary Loan

• Effective Interest Rate: 10% per annum (based on diminishing principal balance)
• Loan Amounts:
  • One-month salary loan: Available for member-borrowers with at least 36 months of total contributions and six months of contributions in the last 12 months
  • Two-month salary loan: Available for member-borrowers 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
• Loan Fees:
  • Service fee: 1% of the total loan amount
  • Late payment penalty: 1%

The SSS Salary Loan is a government-backed initiative that offers a fixed low-interest rate of 10% per annum. This means that borrowers can expect consistent monthly payments, as the interest rate remains unchanged throughout the loan term. Qualified SSS members can borrow the equivalent of one or two months’ worth of their monthly salary credit and repay the loan over 24 monthly installments. Additionally, loan repayment is seamless for employed borrowers, as the monthly amortization is automatically deducted from their salary. This convenience has made it the preferred choice for Filipinos seeking short-term cash solutions.

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 low-interest personal loan option in the Philippines. Sharing many similarities with the SSS Salary Loan, the Pag-IBIG loan offers a low fixed rate of 10.5% and allows monthly repayment through payroll deduction. The loan is payable in 24 to 36 monthly installments. Qualified Pag-IBIG members can borrow up to 80% of their total accumulated value (TAV), which is a sum of all their monthly Pag-IBIG contributions, employers’ share of contributions, and total 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:
  • Processing fee: ₱1,500
  • Late payment fee: 36% per annum on overdue payment
  • Documentary Stamp Tax: 0.75% of the drawn loan amount (deducted from loan proceeds; applies to loan amounts of at least ₱250,000 or for business purposes)

HSBC stands out as a bank offering personal loans with exceptionally low interest rates, starting as low as 0.65%. Borrowers can access loan amounts ranging from ₱30,000 to ₱500,000, providing them with the financial flexibility to fund various needs, such as travel or education.

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 higher

CIMB Bank offers one of the lowest personal loan interest rates in the Philippines. Additionally, the bank provides an all-digital personal loan application process, ensuring convenience for borrowers. Applicants can complete the entire process through the CIMB app, including supplying the required information, uploading necessary documents, and completing the Virtual Verification process. Upon approval, borrowers receive an email with the contract for their legitimate online loan with low interest.

5. BPI Personal Loan

• 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
• Loan Fees:
  • 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)

BPI is also recognized for offering personal loans with some of the lowest interest rates. With an annual contractual rate of 25.60%, BPI’s personal loans provide an affordable borrowing option for Filipinos. The loan amount ranges from ₱20,000 to ₱2 million, with flexible repayment terms of 12, 18, 24, 30, or 36 months.

6. Metrobank Personal Loan

• 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
• Loan Fees:
  • Disbursement fee: ₱1,500
  • Late payment fee: ₱850 per incidence
  • Pre-termination fee: 5% of the outstanding balance or ₱550, whichever is higher

Metrobank’s Personal Loan offers competitive rates, with borrowers enjoying rates as low as 1.25%. Borrowers can secure loans of up to ₱1 million, with repayment terms spanning from 12 to 36 months. The bank processes loans efficiently, typically within seven business days, providing quick access to much-needed funds.

7. UnionBank 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

UnionBank’s Personal Loan stands out with its low interest rate of 1.29%. Furthermore, it offers the longest repayment term in the Philippines, allowing borrowers to repay their loans over five years. Borrowers can access loan amounts of up to ₱2 million, providing financial flexibility for various needs. Approval for UnionBank Personal Loans is often granted within 24 hours, making it a swift and reliable financial solution.

8. 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)

Maybank’s Personal Loan is one of the best low-interest personal loans in the Philippines, offering a fixed interest rate of 1.3%. Borrowers can access loans ranging from ₱50,000 to ₱1 million, with repayment terms spanning 12 to 36 months. This loan provides the financial backing needed for significant expenses, with the loan amount determined by the borrower’s salary and approval from the bank.

9. 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: Up to seven days

RCBC offers one of the lowest personal loan interest rates, with a monthly add-on interest rate of 1.3%. This rate is competitive and affordable, allowing borrowers to access loans of up to ₱1 million with flexible repayment terms of up to 36 months. While approval may take up to seven days, RCBC’s loan offering provides borrowers with a reliable and cost-effective financial solution.

10. CTBC Bank Personal Loan

• Monthly Add-On Interest Rate: 1.39% to 1.79% across all loan terms
• Loan Amount: ₱20,000 to ₱1 million
• Loan Terms: 12 to 36 months

CTBC Bank’s Personal Loan, also known as the Salary Stretch Loan, is a multi-purpose loan accessible to salaried employees and self-employed individuals. It caters to a wide range of financial needs, including home improvement, education, balance transfer, business, travel, and more. The bank offers competitive interest rates, with rates starting at only 1.39% for the monthly add-on rate.

11. Tonik Flex Loan

• Monthly Add-On Interest Rate: As low as 1.7%
• Loan Amount: ₱20,000 to ₱250,000
• Loan Terms: Six to 24 months
• Processing Time: One working day

Tonik Flex Loan distinguishes itself by offering one of the lowest interest rates in the market, starting at 1.7%. Additionally, the interest rate is fixed, ensuring that borrowers’ monthly payments remain consistent throughout the loan term. This predictability enables borrowers to effectively manage their budgets, knowing exactly how much they will be paying each month.

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)

PSBank offers the Flexi Personal Loan, a unique product that combines a revolving credit line with a fixed term. This collateral-free loan provides borrowers with financial flexibility. Additionally, PSBank offers rebates under its loan rebate program when borrowers make advance or excess loan payments.

13. UNO Digital Bank Personal Loan

• Monthly Add-On Rate: 1.79%
• Loan Amount: ₱10,000 to ₱200,000
• Loan Terms: Six, 12, 18, 24, or 36 months
• Processing Time: Up to seven banking days

For those interested in exploring loan products from digital banks, UNO Digital Bank’s #UNONow Loan offers a relatively low monthly add-on rate of 1.79% and an APR ranging from 35.94% to 35.78% across loan terms of six to 36 months. As an added advantage, borrowers can easily apply for this loan with only a valid ID and the UNO app. Approvals are typically granted within seven days, making this digital bank an efficient option for securing a low-interest personal loan.

14. 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 best low-interest personal loans in the Philippines is offered by SB Finance, a subsidiary of Security Bank. SB Finance provides monthly interest rates as low as 1.89%. Loan amounts range from ₱30,000 to ₱2 million, with flexible repayment terms spanning 12, 18, 24, or 36 months. SB Finance prioritizes efficiency, with online applications and loan approvals typically taking place within a week.

15. 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

Depending on the chosen loan term, CBS Easi-Funds Personal Loan offers varying interest rates, ranging from 2.73% to 2.92%. This cash loan serves as a versatile financial solution, enabling borrowers to address various financial needs, including emergency expenses, home renovations, debt consolidation, and more. CBS Easi-Funds Personal Loan empowers individuals with access to loans of up to ₱1 million, ensuring financial flexibility.

How to Choose a Personal Loan with a Low Interest Rate in the Philippines

Selecting the right personal loan with a low interest rate is a critical decision that can significantly impact your financial well-being. Before proceeding, it’s essential to consider several factors and follow a structured approach:

Step 1: Crunch the Numbers

Before applying for a personal loan, take time to calculate your financial needs. Determine the exact amount of cash required after accounting for loan charges. Next, assess how much you can comfortably afford to pay on a monthly basis. Ensure that the monthly installment aligns with your budget without causing undue financial strain.

Step 2: Compare Loan Products

In your quest for the lowest-interest personal loan in the Philippines, it’s crucial not to settle for the first offer you encounter. Conduct a thorough comparison of loan products available from banks, government agencies, and other lending institutions. Key factors to consider include the loan amount, loan term, monthly interest rate, loan fees, and specific requirements.

Step 3: Prepare the Requirements

Once you’ve narrowed down your loan options, review the respective lender’s requirements. Keep in mind that some lenders may impose a minimum annual income requirement to qualify for a personal loan. Additionally, be prepared to provide documentation that verifies your identity and source of income. Organizing and preparing these documents in advance streamlines the loan application process and expedites approval.

Step 4: Read the Fine Print

Before finalizing your loan agreement, carefully review the terms and conditions provided by the lender. This document contains crucial information about your personal loan, including fees, penalties, and repayment schedules. A thorough understanding of the terms will empower you to make informed decisions and potentially save a substantial amount of money in the long run.

Step 5: Apply for the Loan and Prepare for Repayments

Once you’ve identified the ideal loan for your needs, proceed with the application process. Ensure that your documentation is in order and that you meet all eligibility criteria. Additionally, establish a suitable payment scheme for your loan, such as automatic debit arrangements or manual payments through your chosen bank.

Step 6: Manage Your Loan Responsibly

After securing a personal loan, it’s essential to manage your finances responsibly. Make timely monthly payments to avoid late fees and penalties. Budget carefully and strive to avoid overspending, as this will help you meet your financial obligations and improve your overall financial health.

Conclusion

Securing a low-interest personal loan in the Philippines is a vital step towards achieving your financial goals and maintaining financial stability. Whether you need funds for home improvements, education, or debt consolidation, the available loan options cater to a wide range of needs.

By comparing different loan products, understanding interest rate types, and carefully managing your finances, you can access the financial assistance you need while keeping your financial well-being intact. Remember that responsible borrowing and repayment practices are essential to making the most of your personal loan while safeguarding your financial future.