How to Choose the Best Personal Loan for You
If you need additional funds to cover unexpected expenses or make big purchases, taking out a personal loan is a good way to do it.
For starters, most personal loans are unsecured loans, meaning you don’t have to use any collateral in order to borrow money from both banks and financing firms. This makes it a convenient and accessible option for many. However, some personal loans may also be secured loans, which require you to “secure” that loan by putting up an asset like your car or something else of value.
There are many types of personal loans available, which is good since this means most personal loans are accessible for most. However, with so many personal loan options available, it can be challenging to know which one is the best for your needs.
Instead of getting overwhelmed by the number of choices out there, check out these tips and factors you need to watch out for when choosing the best personal loan for you in the Philippines!
1. Determine your loan amount and the repayment period
The first step in choosing a personal loan is to determine how much money you need to borrow and how long you want to pay it back. This will help you narrow down your options and find a loan that fits your budget.
Most personal loans in the Philippines have a minimum loan amount of PHP 10,000 and a maximum loan amount of PHP 1,000,000. The repayment period for personal loans can vary, but most loans have a term of 6 to 36 months.
If the loan amount you need is much higher than the usual personal loan amount range, you would most likely need to apply for a secured personal loan. Despite having to put up a collateral for this type of loan, it doesn’t always mean it’s more inconvenient. In fact, you can get secured personal loans online like the Tonik Big Loan.
This multipurpose, collateralized loan allows you to borrow up to PHP 2,500,000 to jumpstart your dreams. You can pay back the amount for up to 60 months – all you need is a fully-paid condo with a clean title!
2. Consider the interest rate and fees
When comparing personal loan offers, always look at the interest rate and fees that are associated with the loan.
The interest rate is the amount of money that you will be charged on top of the loan amount, and it can vary depending on the lender and your creditworthiness.
Personal loans in the Philippines typically have interest rates that range from 1.2% to 3.5% per month. It's important to note that this is a high-interest rate compared to other types of loans, so shop around and compare offers to find the best rate possible.
You should also consider fees that are associated with the loan. Standard fees for personal loans in the Philippines usually include processing fees, early repayment fees, and late payment fees.
3. Check your credit score
Your credit score is an important factor in determining your eligibility for a personal loan, and it can also affect the interest rate and fees that you're offered.
A higher credit score typically means that you're seen as a lower risk to the lender, and you may be offered a lower interest rate and more favorable terms. If you need to figure out what your credit score is, you can check it for free with a credit bureau in the Philippines.
Fortunately, you're entitled to one free credit report per year. Use this to see what your credit score is and to check for any errors or inconsistencies that may be impacting your score.
4. Shop around and compare offers
Once you have a good idea of the loan amount, repayment period, and your credit score, it's time to start shopping around and comparing offers.
A quick and easy way to do this is by visiting the websites of banks and other financial institutions to see their personal loan offers. For example, we have 4 loan products with different interest rates and offers. Aside from Big Loan, we also have Quick Loan, Flex Loan, and Shop Installment Loan.
Take the time to check out those loans on our website and use our loan calculator tool to see what it may look like when you apply for your chosen loan.
5. Ask friends and family
It’s always a good idea to hear first-hand experiences when it comes to personal loans in the Philippines. For that, don’t hesitate to ask the people you trust the most: friends and family!
Hear them out and get their recommendations or get referred to lenders that they know. At the same time, don’t forget to compare offers. Pay close attention to the interest rate and fees, as well as any additional features or benefits that the loans may have.
Some personal loans in the Philippines offer extra features like flexible repayment terms, the ability to pay in installments, and the option to borrow more money in the future.
6. Read the fine print and understand the terms and conditions
This applies to literally all contracts you sign. It’s basic knowledge at this point, but it’s super important that it’s worth repeating again and again: always read the fine print and understand the terms and conditions before you agree to anything!
Once you've carefully reviewed the terms and conditions of the loan and you're confident that it's the right fit for you, you can go ahead and apply for the loan.
Before applying, understand the process for the loan and what documents and information you'll need to provide to get approved. The lender will then review your application and credit history, and if you're approved, you'll receive the loan funds in your bank account.
Find the Best Personal Loan in the Philippines at Tonik Digital Bank
Choosing the best personal loan for you in the Philippines can be a challenging task, but with some careful research and comparison, you can find a loan that fits your needs and your budget.
Just a few reminders: Make sure to determine your loan amount and repayment period, consider the interest rate and fees, check your credit score, shop around and compare offers, and read the fine print before you agree to anything. By taking the time to carefully evaluate your options, you can find a personal loan that will help you meet your financial needs.
One way to make it easier for you is to apply for an all-digital loan like the ones we have here at Tonik Digital Bank! With only minimal requirements, you can do it all on the Tonik App. You may not even have to get out of bed to apply. Download our app to get the loan you need today!