Got a lot of sudden needs and wants? Maybe getting a Personal Loan is your sign!
With the sudden rise of the unemployment rate in the Philippines caused by the coronavirus, getting a Personal Loan is one of the fastest ways to finance one’s needs during a crisis. If you are planning to meet your needs and wants, should you consider getting a Personal Loan? Know more about Personal Loan here:
- Types of Personal Loan
- Difference between Unsecured and Secured Personal Loan
- Examples of Unsecured Personal Loan
- Examples of Secured Personal Loan
- What are the requirements?
- Where to get Personal Loan
- Key Takeaways
Types of Personal Loan
Unsecured Personal Loan
An unsecured Personal Loan doesn’t require the borrower to provide collateral to the lender. If you are applying for an unsecured Personal Loan, the minimum amount you can borrow would be Php 10,000 up to Php 1,000,000. The total amount, terms of payment, and interest rate will still vary depending on the lender or financial institution you will seal an agreement with.
This type of personal loan is recommended for an applicant who’s in immediate need.
Secured Personal Loan
The borrower is required to provide an asset to the lender or financial institute to verify the personal loan application. Collateral is an item of the borrower with great value such as a vehicle and property. The Lender holds the asset until the borrower paid the loan amount in full.
With a secured personal loan, the borrower can apply for a higher loan amount with a low-interest rate. This type of personal loan is recommended for the borrower who plans to start up a personal business or funding property.
Difference between Unsecured and Secured Personal Loan
The major difference between the two (2) Personal loans is that the borrower needs an asset in applying for a secured personal loan while an unsecured personal loan doesn’t require any asset.
Applying for an unsecured personal loan has a lower loanable amount while secured personal loan exceeds the loan limit of an unsecured personal loan.
Examples of Unsecured Personal Loan
- Personal Loans – This type of loan can be used for different purposes or personal matters.
- Credit Cards – Credit card is one of the most popular and personal loan in the Philippines as the borrower can freely purchase goods and services on credit.
- Home Improvement Loans – This type of loan is popular among couples and professionals who aspire to upgrade their property.
- Student Loans – Student Loans are used to pay for education fees and other school requirements.
Examples of Secured Personal Loan
- Auto Loan – Allows the borrower to have his/her dream car. The borrower can apply for this type of loan through a bank and a car dealership.
- Housing Loan – A loan to purchase a property or house. This type of loan can be applied in your chosen developer and bank.
- Business Loan – This type of loan can be used to start up a business, pay for wages or purchase new equipment.
What are the requirements?
For Locally Employed
- Two (2) valid government-issued ID with photo and signature.
- For employed: latest 1-month full payslip
Note: Requirement varies depending on the financial institution you will seal an agreement with.
For Foreign Nationals
- Valid passport
- Any of the following proofs of local residency:
- Immigrant Certificate of Residency (ICR)
- ACR I-Card with Visa status “Permanent”, otherwise, should be valid for more than 1 year
- Visa and Work Permit/Alien Employment Permit (AEP) with a validity of more than 1 year
- Special Resident Investors (SRIV)
- Special Resident Retirement Visa (SRRV)
Note: Some financial institute requires more document and photocopy of each requirement.
Where to get Personal Loan
- SSS – There are different types of Personal Loan in SSS like Salary Loan, Calamity Loan, etc.
- Pag-ibig – Just like SSS, there are wide options for Pag-Ibig Loan like Multi-Purpose Loan and Housing Loan.
These loans are designed to help out the members with any instant financial need.
Note: Be sure to check SSS and Pag-Ibig website for more information about Personal Loan.
There are plenty of banks in the Philippines like BDO, BPI, Metrobank, PSBank, Security Bank, Chinabank and more. These banks offer different types of Personal Loans with different requirements, loanable amounts, interest rate, and terms of payment.
Any decision that involves money can give you mixed emotions. Here’s the last and practical reminder before applying for a Personal Loan:
- Ask yourself if getting a Personal Loan is the answer to meet your needs and wants.
- Re-check your savings and analyze your paying capacity. Don’t lose your collateral just because you missed paying your lender.
- Spend the loan amount wisely.