A growing economy and a robust retail lending environment mean that there are many banks in Philippines offering a variety of loan products for retail customers. Here, we will take a brief look at some of the main categories of Loan Products Comparison available in Philippines:
Housing Loans
A Home Loan is a loan product secured by a real estate where funds can be used for any of the following purposes: purchase of vacant lot, purchase of house and lot, purchase of townhouse unit, purchase of condominium, house construction, refinancing/take out, house renovation / home improvement and reimbursement of acquisition cost.
There are a variety of home loan products from different banks to choose from. If you are interested in an affordable home loan then you need to look at the Pag-IBIG government-mandated housing loan program (offered by the Home Development Mutual Fund (HDMF) also know as Pag-IBIG Fund) that offers affordable home loans to Filipinos who are members of the Pag-IBIG Fund.
Personal Loans
These are non-collateralized, unsecured cash loans to finance your personal/aspirational needs. You can use it for a variety of purposes including home improvements, medical emergencies, travel, tuition, debt consolidation etc. There are a wide variety of personal loans available ranging in tenors from six months to 5 years with effective interest rates varying from about 20% to around 40%.
Auto Loans
Auto loans are used to finance the purchase of brand-new or second-hand cars. Loan tenors vary from 12 months to 5 years for brand new cars while tenors for second-hand vehicles will vary with the age of the vehicle, older vehicles having lesser tenors. Margin of financing can go up to 80% in case of new cars and up to 70% for used cars. Some banks even offer pre-qualified car loans depending upon your income status.
Business Loans
These loans help businesses obtain financing for a variety of business needs including short term operational costs, to help meet cash flow requirements, to expand and improve, for emergency repairs and maintenance, to increase working capital and to purchase supplies, inventory and equipment.
These include working capital loans, factoring loans, short-term loans, Peso/FX credit facilities, overdraft, hire purchase loans, trade financing credit services and agri-processing loan programs (for instance, the Sugar Loans Program of the Philippine National Bank offers a range of credit facilities that facilitate sugar production and processing) and MSME financing programs like the Business Development Loan Facility under the SSS (Social Security System).
Student Loans
These help students pursue higher courses of education. One of the most notable student loan programs in the Philippines is the HELPS – or the Higher Education Loan Program for Students – a loan facility provided by the state-owned Development Bank of the Philippines (DBP).
DBP will provide some P2 billion in loans to qualified schools and other educational institutions for re-lending to poor but deserving students. Schools with transparency and good governance practices, proven level of excellence, track record of performance, and tie-ups with employers or manning companies are eligible to borrow under the DBP-HELPS.
Loans in Philippines 