6 In-Depth Tips For Comparing Loan Programs From Multiple Lenders

It’s a great time to be a borrower in the Philippines. Despite receiving more than its fair share of doom and gloom, the macroeconomic outlook for the country remains strong, with accredited lenders now increasingly willing to offer loans even to Filipinos who have yet to build a credit history. 

Still, choosing the right loan isn’t easy, especially with so many offers coming from an expanding pool of providers, each promising the “lowest rates” and “fastest approvals”. 

Once you dig deeper, things can get a lot more complicated, with many lenders using confusing terms or offering unreasonably long disbursement times.

If this sounds familiar, you’re not alone. Even with so many loans available, Filipinos can still come up against many unexpected hurdles when they look into their options. 

Fortunately, once you know how to evaluate loans methodically, things can become a lot clearer. Here are a few tips to help you find the lowest interest personal loan Philippines-based borrowers can get.

1. Compare The Total Cost, Not Just The Interest Rate

While monthly interest rates are important, they don’t give you the whole picture. What ultimately matters is the total cost of borrowing.  

When assessing potential loans, you’ll want to look for the annual percentage rate (APR), which includes both the interest and other charges like processing, disbursement, and service fees. 

Untrustworthy lenders tend to advertise a lower interest rate but tack on hidden fees, so make sure to look beyond simple monthly interest.

2. Check For Transparency In Fees And Terms

To build off the last tip, you’ll want to see how lenders present their rates or react to your questions. 

Reputable lenders are upfront about the true cost of the loan, including what happens if you miss a payment or pay off the loan early. 

Meanwhile, providers that use a lot of vague terms or fine print may be trying to dupe you into taking on excessive interest rates and other fees.

If a lender can’t explain their charges clearly or avoids giving a sample amortization schedule, you may want to keep looking.

3. Don’t Send Loan Applications Until You’re Ready

With some digital banks, all you have to do to apply for a loan is tap a button on their app. With Maya, for instance, you can simply navigate to the Loans tab and tap on the “Apply now” button. If you’re eligible, you’ll be asked to input your preferred loan amount and complete the application process. Then, simply click “Accept” if you’re ready.

Still, you shouldn’t send any applications at all if you’re still assessing your options. When you send a loan application, your lender is probably going to run a credit check, which can slightly lower your credit score for a few months because they could indicate a potential new financial commitment. 

If you send multiple applications, it’s highly likely that you’ll accumulate multiple hits to your credit score. When that happens, you’ll be far less likely to get loan approvals from any of your prospective lenders.

Rather than risk rejection and a lowered credit score, what you should do instead is to do a little research first. Look up online reviews and your own transaction records and check these against your options before committing.

4. Understand Each Lender’s Eligibility Requirements

Credit scores are not the only basis for loan terms and approvals. Each lender has their own requirements when it comes to age, income, employment type, and credit history. 

Historically, mainstream banks favor salaried employees with long credit histories. Today, more and more lenders also use alternative data like e-wallet usage, transaction activity, or self-reported income to paint a more detailed picture of each borrower’s risk. 

In any case, you’ll want to shortlist lenders whose eligibility criteria match your actual profile, especially if you’re self-employed or new to formal credit. 

For instance, if you already use a digital bank’s e-wallet or savings account, you may want to look further into their loan offers—you may already be qualified without knowing it!

5. Compare Payment And Disbursement Channels

Overly restrictive channels can affect your ability to pay your loan on time. For example, some lenders require over-the-counter payments and disbursements, making loan management inconvenient if they don’t have a branch close to your home or workplace. 

Others may support online banking or in-app transactions, but not necessarily with the bank accounts or e-wallets you prefer. 

To avoid hassles, you’ll want to choose the lender with the most convenient application, disbursement, and payment options.

6. Compare Repayment Term Options Side By Side

Loan terms affect both your monthly payments as well as the total cost of your loan. For the same loan amount, a longer term typically results in smaller monthly payments but higher overall interest. 

A shorter term, on the other hand, costs less in total but may strain your monthly budget. Compare repayment timelines across your shortlisted lenders to find a plan that matches your usual cash flow.

Fund Your Goals, Not Your Expenses

Whether you apply for a credit card or a personal loan, you’re making a serious commitment, one that could impact your ability to access future funding. 

Before you send your application, you’ll want to make sure your loan fits a specific need and has terms that are both fair and realistic. 

Make it a habit to read between the lines so that you can make choices that truly support your ambitions.