What is an Interest?
Interest is the cost of borrowing money. When applying for a loan with banks and other non-banking financial institutions, the principal amount that is borrowed from them will be charged with an interest and sometimes, depending on the risk of borrowing, the term of the loan and the loan amount – interest rates vary.
The lower the interest rate banks and other financial institutions charge, the easier it is for borrowers to make repayments on their loans and finish paying it off.
Banks that Offer Lowest Interest on Personal Loans
| BANK | LOAN AMOUNT | INTEREST | LOAN TERM |
| Bank of the Philippine Islands (BPI) | up to P 2M | 1.2% / month | 12 to 36 months |
| Development Bank of the Philippines (DBP) | P10,000 to P1,000,000 | 6.6% / annum | 12 to 48 months |
| China Banking Corporation | P15,000 to P1,000,000 | 6.6% / annum | 6 to 36 months |
| Rizal Commercial Banking Corp. (RCBC) | P50,000 to P1,000,000 | 1.3% / month | 6 to 36 months |
| Security Bank Corporation | P30,000 to P2,000,000 | 1.39% to 1.89% / month | 1 to 36 months |
| Eastwest Banking Corporation | P25,000 to P2,000,000 | 1.49% to 1.89% / month | 12 to 36 months |
| Citibank | P20,000 to P2,000,000 | 1.26% / month | 12 to 60 months |
| United Coconut Planters Bank (UCPB) | P50,000 to P300,000 | 18% to 54% / annum | 12 to 36 months |
| Hongkong & Shanghai Banking Corp (HSBC) | P30,000 to P500,000 | 14.29% / annum | 6 to 36 months |
| Maybank Philippines Incorporated | P50,000 to P1,000,000 | 1.3% / month | 12 to 36 months |
| Phil Bank of Communications (PB COM) | P40,000 to P2,000,000 | 1.68% / month | 12 to 36 months |
There are many factors that influence the interest rate that banks provide their customers when it comes to loans. Risk of default is one of the most important considerations that they take into account. Some personal loans might require collateral while some may not. Typically, secured loans (loans with collateral) are given with a lower interest rate as compared to that of an unsecured loan.
Conclusion
When borrowers are given loans with lower interest rates, it makes it easier for them to make repayments of the loan over the course of the loan term. While it may be true that loans with stringent requirements provide lower interest rates than those that are approved and disbursed immediately, there are personal loan products that have low interest and have minimal documentation requirements.
Filipinos now have access to loans with better offers, especially with the competition in the financial market. When one has the diligence to compare loan products, they will surely be able to get the best rates that will fit their needs.
Piggyy
״The secret of happiness, is not found in seeking more, but in developing the capacity to enjoy less״ - Socrates
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