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Long Term Personal Loans Philippines

Filipinos prefer loans with longer repayment periods than shorter ones because they have more flexibility on payment terms. The main advantage of a more extended loan repayment period is that it lowers the amount of money to be paid each month. It can make it easier to afford the monthly payments, especially if the borrower has a tight budget.

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Written by: Big Piggyy

Verified by: Krisette C.L

Krisette C.L

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Krisette has been hustling online media industry since 2011. She's a copywriter, editor, and online media consultant.

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4.8/5
Tonik

Tonik offers a fully digital banking experience and better loan offers. Don’t miss their products and apply now.

Rating

4.7/5
UnionBank

UnionBank offers Quick Loans up to ₱1 million. Apply for this loan product now.

Rating

4.5/5
Maybank

MayBank helps businesses and individuals with competitive financing offers. Apply for a loan now.

Rating

4.4/5
Security Bank

Security Bank offers attractive loan terms. Get this offer now.

What is a Term Loan?

 

A term loan is a loan that has an agreed repayment schedule over a well pre-defined duration of the loan for a lump sum cash amount. It’s typically repaid over a fixed period of time and is used for various purposes, including business expansion, equipment purchases, working capital, or other purposes.

 

In other words, term loans are types of financing with a fixed (or a floating interest rate) rate and a fixed repayment schedule.  It can make budgeting and forecasting easier for borrowers as they know exactly how much their loan payments will be each month.

 

There are two types of term loans – short-term loans and long-term loans

 

Short Term Loans vs. Long Term Loans

 

The difference between short-term and long-term loans is the repayment period of the loan amount. Short-term loans are repayable within a few months to not more than a year. They have loan amounts of smaller value that are accessible and quickly disbursed. 

 

On the other hand, a long-term loan generally refers to financing repayable for three up to 20 years in the case of home loans. 

 

Different Long-Term Loan Products in the Philippines

 

Banks and financing companies offer different loan products, which are regulated by the Bangko Sentral ng Pilipinas (BSP).  The most common long-term loan products offered in the Philippines are:

 

 

One of the most popular long-term loan products is the personal loan. It’s the most flexible and accessible loan to acquire that banks and other financing companies offer. Unlike other types of loans, personal loans are multi-purpose – a borrower can have different reasons for applying for a long-term loan and choose a loan offer that matches their ability to repay it. 

 

Banks that Offer Long Term Loans in the Philippines

 

Maybank 

Maybank offers long-term loans for both individuals and businesses in the Philippines. For businesses, the maximum loan term they can offer is 10 years. The repayment includes interest that is payable monthly in arrears and the principal amount can be paid in equal or graduated monthly or quarterly payments. 

 

Land Bank of the Philippines

Land Bank of the Philippines offers housing and business loans to both individuals and entrepreneurs. 

 

The housing loan is offered with a minimum loanable amount of Php500,000 and can be repaid for a maximum loan term of 20 years. 

 

The business loan is open for small and medium enterprises to finance business expansions, purchase additional machinery and equipment, acquire fixed assets, finance permanent working capital arising from expanded operations, or project financing. 

 

Union Bank of the Philippines

UnionBank also offers home and auto loans available for repayment for up to 20 years, while their auto loans can be repaid for up to 5 years. 

 

Tonik Bank

Tonik Bank boasts as a fully digital bank that offers loans for amounts up to Php50,000 and can be repaid within 24 months with a fixed monthly interest rate of 7%. With only 1 valid government ID and proof of income, a borrower can avail of a term loan within just a few minutes. 

 

Security Bank

There are many term loans that Security Bank offers, such as personal loans, auto loans, home loans, salary advance loans, and employee loans. 

 

Among the many long-term loans available, the personal loan offers a maximum repayment period of 3 years, a maximum loanable amount of Php2,000,000, and an interest rate based on the bank’s prevailing interest rates. 

Rating

4.4/5
Security Bank

Security Bank offers attractive loan terms. Get this offer now.

Review

Rating

4.5/5
Maybank

MayBank helps businesses and individuals with competitive financing offers. Apply for a loan now.

Review

Rating

4.7/5
UnionBank

UnionBank offers Quick Loans up to ₱1 million. Apply for this loan product now.

Review

Rating

4.8/5
Tonik

Tonik offers a fully digital banking experience and better loan offers. Don’t miss their products and apply now.

Review

Advantages & Disdvantages of Long-Term Personal Loan

pros

Advantages

  • Lower monthly amortizationWhen payment periods are stretched, the repayment of the principal amount lessens, so most people prefer long-term personal loans over loans with shorter terms. 
  • Higher Loan ValueStretching the loan term means that the borrower’s salary can accommodate a much higher loan amount with lower repayment of the principal amount each month. 
cons

Disadvantages

  • Longer Loan Repayment Not many people will want to pay back their loans over an extended period of time. Some people prefer to be liability-free sooner, even if they have to pay a higher amount in short loan tenure.
  • Higher Interest RateWith a longer repayment period, a borrower’s risk of default is higher. It also means that the lender can’t get back the amount lent soon. Higher interest can cover both risks for the lender. 
  • Fees Due to Early Termination of LoanIf the borrower decides to pay back the loan amount earlier than the initially agreed term, some lenders will charge an early termination fee to cover the interest income they could have earned until its maturity. 

Conclusion

 

Long-term loans may be beneficial for someone who is in need of a larger amount of money and wishes to pay for a longer period of time. However, longer loan tenure equates to a higher interest rate. Borrowers should read the fine print first before signing the agreement.

Big Piggyy

"Show me the MONEY!!!" – Jerry Maguire

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