This review will be about different loan companies in the Philippines, what are they, how they work, what are the terms and requirements for their credit products, etc. Loan companies are popular among individuals and businesses in the PH. These financial or loan companies offer a variety of credit products to suit different needs, ranging from personal loans for unexpected expenses to business credits for expanding operations.
The first thing you need to know is that lending or loan companies are regulated by the Central Bank of the Philippines (Bangko Sentral ng Pilipinas, BSP). It is very important that the financial companies were legal and provided quality services for the Filipinos. There are different players in the market, banks, different lenders, e-wallet services, pawnshops, etc. When borrowers search for a credit, it’s essential to compare interest rates and repayment terms to find the best deal for your situation, and AdvanceLoans.ph will help you to find the best loan service.
Table of Contents
Loan Companies Philippines
Well, loan companies in the Philippines are different, but there are 2 main groups:
- Banks – these traditional loan companies provide different financial services and have some credit products, the most popular are: personal loans, credit cards, business loans, home loans or housing loans, agricultural loans, travel loans, auto loans, etc. The most popular banks in the PH are BDO, BPI, Tonik, Metrobank, Security Bank, Union Bank, etc;
- Lenders provide long or short-term loans for individuals who need money for different needs. Often people name these loan companies as payday loans. However, these types of credits often come with high-interest rates and fees, and should only be considered as a last resort.
It’s important to research and compare different payday loan companies in the Philippines before deciding to take out a credit with one. Some popular payday loan are Digido, Finbro, and CashXpress. While payday loans can be helpful in emergencies, it’s crucial to borrow responsibly and only take out what you can afford to repay. Also, please read before applying all terms.
About Lenders and Who Are They
Lenders in the Philippines are essential financial institutions that offer various credit products with varying terms, interest rates, and requirements. They provide financial support for Filipinos, allowing one to access much-needed capital to solve their issues and reach goals.
The most common types of lenders include banks (traditional, digital and neobank), credit cooperatives, loan brokers and microfinance institutions. Additionally, online loan lenders, payday lenders, mortgage lenders, business lenders, home loan lenders, and personal loan lenders are also present in the PH. Let’s take a look at all types of loan companies with examples
Online Loan Lenders or Payday Lenders
Online loan lenders and payday lenders provide quick and easy access to short-term loans. Examples of online lending platforms in the Philippines are Cashxpress, Cashalo, OLP, Tala, Digido, etc. These platforms typically offer personal loans, with the credit amount and interest rates varying depending on the borrower’s creditworthiness and other factors.
These platforms use technology to streamline the loan application process and provide quick decisions on loan approvals online, so you don´t need to go somewhere, whole process is online. Online lending platforms are useful in urgent cases, but people often don´t read terms and then have additional financial problems, cause they don´t repay credit before the due date.
Mortgage Lenders and Home Loan Lenders
Mortgage lenders specialize in providing financing for the purchase of homes and properties. Some popular mortgage lenders in the PH include PNB Housing, BPI Family Housing, and Security Bank Home Loans.
Home loan lenders provide financing for the purchase or renovation of homes. Some popular home loan lenders are Pag-IBIG Fund, BPI Housing Loans, and PSBank Home Loans.
Personal Loan Lenders
Personal loan lenders provide financing for personal expenses, such as medical bills or home repairs. Examples of personal loan lenders: EastWest Personal Loan, BDO Personal Loan, and Citibank Personal Loan.
Business lenders provide funding for businesses to start or expand operations. Some examples of business lenders: SB Corp, Tonik Big Loan, BPI Family SME Loan, and DBP Loans. Microfinance institutions offer microloans to entrepreneurs who cannot access credits from traditional lenders.
Loan brokers are also present in the Philippines and play an important role in connecting borrowers with lenders. Brokers are intermediaries who act as middlemen between borrowers and lenders, helping borrowers find the best credit deals that suit their needs and financial capabilities.
Real credit brokers offer a range of services, including providing advice on the best loan options, but the responsibility is only yours, processing credit applications, and negotiating loan terms and conditions. Some even also help borrowers prepare the necessary documentation needed to apply for loans.
Credit brokers work with a network of lenders, including banks, credit cooperatives, microfinance institutions, online loan lenders, payday lenders, and other lending institutions. They can help borrowers find the most suitable lenders for their needs.
While credit brokers can be helpful in finding credit deals, it’s important to be cautious when working with them. Some loan brokers may charge high fees or work with unscrupulous lenders. It’s important to research and compare different brokers in the Philippines to ensure that you are working with a reputable and trustworthy one. Some examples of the popular brokers: iMoney, LoanSolutions, and MoneyMax.
Also, there are other online loan brokers that mainly cooperates with payday lenders Binixo, Loanonline, Mazilla, etc. They can give you additional information about where to apply for a loan, but further they will constantly send you emails/SMS in order you get the credit. The last about brokers, that, please avoid those whom you need to pay for their services, don´t add you bank cards to such services, they can charge money from one on monthly base.
There are many banks, ranging from large multinational banks to small rural banks. The most prominent banks: BDO, BPI, Tonik, Metrobank, Security Bank, Landbank, etc. These banks offer a wide range of services, including online banking, mobile banking, and ATM services.
Apart from traditional banks, there are also digital banks that have gained popularity in recent years. Digital banks offer banking services through online and mobile platforms, allowing customers to access their accounts and perform transactions anytime and anywhere. Some popular digital banks in the Philippines include ING, CIMB, and UnionBank’s EON.
Neobanks and What Do You Know About Them
In addition to traditional banks and digital banks, neobanks are also gaining traction in the Philippines. Neobanks, also known as challenger banks, are entirely digital banks that operate without physical branches. So, everything is online. They offer financial services through mobile apps and online platforms, providing customers with an easy and convenient way to manage their finances.
Some of the popular neobanks: Tonik, Komo, and OX Bank. These neobanks offer a range of services, including savings accounts, time deposits, quick loans, debit and credit cards. They also provide features such as cashback rewards, free fund transfers, and bill payments.
Important to know, that neobanks are rapidly changing the banking landscape in the Philippines, offering a new and innovative way for customers to access financial services. As they continue to expand their services, neobanks have the potential to revolutionize the way Filipinos manage their finances.
Pawnshops and How They Work In The Philippines
Pawnshops are a common sight in the Philippines, providing financial services to Filipinos who may not have access to traditional banking services. They offer credits to individuals by taking valuable items, such as jewelry or electronics, as collateral. The interest rates charged by pawnshops are usually higher than those offered by banks, and the repayment terms are shorter.
Some of the largest pawnshop chains are Cebuana Lhuillier, Palawan Pawnshop, and Tambunting Pawnshop. In addition to providing pawn loans, these pawnshops also offer remittance services, bills payment, and micro-insurance. Overall, pawnshops play an important role in providing financial services to underserved communities in the Philippines.
E-Wallets and Why They Are Important
E-wallets have gained popularity in recent years as a convenient and secure way to make online transactions and payments. In the Philippines there are several e-wallet providers that offer various services, including:
- peer-to-peer transfers;
- bills payment
- online shopping.
Some popular e-wallets are GCash, PayMaya, and Coins.ph.
The unique features of e-wallets is their ability to provide credits to their users. E-wallets leverage their users’ transaction history and other data to assess their creditworthiness and provide quick loans in real-time. For example, GCredit, a feature of GCash, offers personal loans of up to PHP 30,000 with low interest rates and flexible repayment terms.
E-wallets have become an essential tool for Filipinos to access financial services, especially for those people who do not have access to banking services. They offer a convenient way to manage finances and provide access to credits without the need for collateral or a lengthy application process. In some cases they even more convenient than payday loans. E-wallets have the potential to revolutionize the way Filipinos access financial services.
Peer-to-Peer or P2P Loan Companies
Peer-to-peer (P2P) lending companies in the Philippines connect borrowers with investors through an online platform. It is an alternative to banks. P2P companies provide loans at lower interest rates to borrowers who may not qualify for credits from other lenders. The most popular such loan companies are FundKo, Acudeen and Blend.ph.
- Borrowers can apply for loans online;
- Lending companies assess their creditworthiness and assign an interest rate;
- Investors can then choose to invest in the loans they find most attractive.
Overall, P2P lending companies offer a convenient and efficient way for borrowers to access loans and for investors to earn attractive returns.
About Loan Cooperatives or Credit Unions
Loan cooperatives, also known as credit unions, are financial institutions owned and controlled by their members. They offer credits to their members at reasonable interest rates, using members’ deposits as collateral. Credit cooperatives provide credits to members at lower interest rates than banks.
In the Philippines, there are various credit cooperatives that cater to different sectors of society, such as teachers, government employees, and military personnel. One example is the Government Service Insurance System (GSIS) that provides credits to government employees. Loan cooperatives are non-profit organizations that aim to help their members achieve financial stability by providing access to affordable credits.
Microfinance Institutions (MFIs)
These institutions provide small credits to low-income individuals and micro-entrepreneurs who do not have access to banking services. MFIs use a group lending approach, where borrowers form a group and are collectively responsible for the credit repayment.
Some examples of MFIs in the Philippines include the Center for Agriculture and Rural Development (CARD), Negros Women for Tomorrow Foundation (NWTF), and the ASA Philippines Foundation. These institutions aim to promote financial inclusion by providing access to credit and other financial services to those who are often excluded from the formal banking sector.
Salary Loan Companies
These loan companies offer credits to employees based on their salaries. Salary loan companies offer a quick and convenient way for employees to access credits, without the need for collateral or extensive documentation.
Examples of salary loan companies in the Philippines include SSS Salary Loan, Pag-IBIG Multi-Purpose Loan, and 5-6 other credit providers. These loan companies assess the borrower’s eligibility and creditworthiness based on their employment status, salary, and other factors. Overall, salary loan companies offer an accessible and efficient way for employees to obtain quick loans, which can help to address short-term financial needs such as emergencies or unexpected expenses.
Non-bank financial institutions (NBFIs)
NBFIs in the Philippines provide a wide range of financial services:
- Loans (personal loans, housing loans);
- Other financial products;
NBFIs are not banks but these institutions have licenses to offer financial services and products. The most popular examples of non-bank financial institutions are Sun Life Financial, Philam Life, and PruLife. These organizations support the Philippine financial sector, help Filipinos to solve their issues, especially those who are unbanked and have no possibility to use bank services for some reasons.
Summary About Loan Companies in the Philippines
Overall, loan companies in the Philippines play a critical role in supporting economic growth and financial stability by providing much-needed financing to individuals and businesses. Different credit products cater the different types of borrowers from business owners to those who has a poor credit history. So, you should choose the credit product that suites you the best. Of cause, the best option is to start earning more and don´t apply for any credit at all.
Very important for borrowers to take responsibility for their loan application and understand the credit terms and conditions before applying. Failure to repay the loans can result in severe financial consequences and negatively impact the credit score. Borrowers must be aware of predatory lending practices, such as high-interest rates and hidden fees, which can trap them in a cycle of debt. So, please understand the potential risks, it is essential in order you were sure that credit will really help you to solve your financial issues.