Whether you are a student, parent, regular income earner, or even a business owner, you must be aware that vast sums of money are difficult to come by, and it is even more difficult to save as the costs of daily necessities—whether at school, home, work, or business—all keep rising. Regardless of how much money you have saved on your own, you may not be able to put much of it toward major purchases for your work or personal expenses. When you are short on cash due to an unexpected expense or simply need a little more money to buy something big, bank loans can indeed be your best option. Depending on their intended use, available in the Philippines are a wide range of types of loans, but bank loans remain a major source of finance for businesses.
Contrary to popular belief, applying for bank loans is a much simpler process than it used to be. With the appropriate requirements in position, obtaining a bank loan could be one of the soundest and most reliable decisions you will make for your personal or work expenses. The primary advantage of bank loans is that they offer more convenient and flexible payment options and loan terms. You are good to go as long as your payments are on time and you have good credit. Bank loans are more popular because they offer lower interest rates.
Different Loans Available to Filipinos Through Banks in the Philippines
Top banking institutions in the Philippines currently offer the following bank loans to Filipinos:
1. Payroll loans
These are loans that banks offer to employees of companies who have a deposit arrangement with the bank. The employee’s salary is used as collateral or security for the loan, upon which the bank then advances money.
2. Cash loans
If you don’t want to give your company’s information, you can also apply directly to an institution that offers payday-type loans such as LBC or Maybankard. However, this type of loan is not recommended because it requires a more extensive application process than other types of personal financing and has higher interest rates than bank loans
3. Credit card cash advances
This is a loan option under your credit card limit. This limit is set depending on your credit card type and your monthly income. A credit card cash advance is another loan option that you can use if you need to borrow money. This is a loan option under your credit card limit, which means the amount of money you can borrow depends on what type of credit card and how much income you make. The interest rates for this loan option are usually higher than other loans though because it is seen as an unsecured loan since there is no collateral involved. It is also important to know that even if it has a relatively low rate compared to other loans, the fees associated with cash advances are usually higher so make sure to read all terms before going into one.
A common way people get into trouble with this kind of debt is just spending more than they have in their account or using credit cards too often without considering other options first – so be careful! The good news though is that unlike some other types of loans like payday lenders or personal lines of credit where there may not be any grace periods (which means no period between when someone makes an error payment on their bill), most banks offer longer grace periods when it comes down costing them less money overall overtime thanks again largely due these policies being put in place after much research was done by experts familiar with both sides’ circumstances.
4. Personal Loans
The most common type of bank loan in the Philippines, personal loans can be used for just about any need, from investments to medical bills to vacation expenses. Personal loans are available from both banks and credit unions. Banks typically offer higher interest rates than credit unions but require a larger down payment on your home or other collateral. Credit unions tend to provide lower interest rates with smaller down payments required, but they often have less flexible terms regarding repayment schedules and limits on how much money you can borrow at once.
5. Car loans
This type of loan allows the borrower to buy a brand-new vehicle, a second vehicle, or refinance a vehicle that they already own. Among other bank loans, car loan programs frequently receive the most applications, as many Filipinos desire to own their cars to combat the traffic problems that commuters encounter in many Philippine cities. The amount of money that a borrower must set aside for the amortization of the vehicle is determined by the down payment, the type of vehicle, and the number of months included in the payment term.
A. How much can be borrowed for a car loan?
You can borrow up to 80% of the car’s value. This means that if you want to buy a car worth P1 million, you will only have to pay off 20% of it or P200,000. The monthly income requirement is at least P50,000 gross monthly income for most banks
B. How much are the monthly payments?
The monthly payment is based on your income and ability to pay for the loan. It may range from as low as P300 per month up to thousands of pesos depending on how much money you make every month.
C. What is the interest rate?
The interest rate varies from bank to bank so it is best that you check with each one before applying for your loan application or else ask them if they offer lower rates than their competitors do so you’ll know what kind of deal awaits once everything has been approved by both parties involved (borrower vs lender). Interest rates typically range from 4.63 percent to 27.28 percent.
6. Housing and renovation loans
A housing loan can be used to pay off an existing mortgage, build a new house, renovate an existing one, compensate the borrower for the purchase of a property, or purchase a lot. Borrowed funds may also be used for personal purposes. Moreover, it is an excellent option if you want to buy the home of your dreams but cannot afford to pay in full. Obtaining the home of your dreams may be made much easier with the assistance of a housing loan.
The Pag-IBIG Housing Loan is the first thing that comes to mind when considering housing loans in the Philippines. With the government institution approving a total of PHP 63.75 billion in housing loans in 2020 alone, many Filipinos chose this route to secure a home for their families or personal investment.
Banks, on the other hand, provide home loans that work in your favor. They provide competitive rates and flexible terms that will not break the bank.
Banks also offer home improvement loans for those who already own a property and want to build or renovate it to suit their lifestyle or needs. Before applying for home construction or renovation loan, take into consideration the size of your property and the estimated costs. Banks have different terms and conditions so check them out to see if they work with your budget. Check the interest rates too; some banks offer low monthly payments but have longer periods for repayment.
Fortunately, Bria Homes offers both housing loan options to assist aspiring homebuyers in financing their dream home. You may check BRIA Homes’ official website to determine which housing financing options are best for you and your future home.
BRIA Homes primes itself on the development of affordable house and lot packages and easy-on-the-pocket condominium units that caters to ordinary Filipino families who aspire to acquire their own homes. It had become the perfect choice for average Filipino workers who wanted to invest in a home that is both high quality and affordable.
Read Also: A Guide to your Housing Loan Options: Pag-IBIG or Bank Loan?
In the end, there is no reason to be concerned about borrowing money from a bank. In many cases, having a line of credit open can make a big difference in sustaining your cash flow, keeping you in the good favor of others, and helping you fulfill your dreams now rather than later. Hopefully, your bank loan will provide you with the attempt to enhance your financial management skills, improve your quality of life, and assist you in achieving complete financial freedom.
Written by MC Sanchez