Personal loans: What they mean and why they matter

Whether it's a medical emergency, a dream wedding, or a long-overdue home renovation, a personal bank loan in the Philippines could be the financial lifeline you didn't know you had access to.

What is a personal loan?

A personal bank loan in the Philippines provides you with a lump sum amount upfront, with no collateral required. Repaid over a fixed term of 1 to 3 years at a fixed interest rate, it's a straightforward and accessible way to fund what matters most to you.

The maximum loanable amount with Metrobank can be up to 2 million pesos, depending on the approval of your application.

A personal loan can be used for different purposes, such as paying for home renovations, medical bills, weddings, business expansions, or debt consolidation.

All things considered, a personal loan can work to your advantage, but it is important to know how to manage a personal loan and other debts before applying for one.

For your day-to-day finances, a personal loan can mean the difference between financial stress and stability, provided it's used with a clear purpose and a solid repayment plan.

How does a personal loan work?

Most of the loan types we know are reserved for specific uses. A home loan can be used to buy a house, while a car loan can be used to upgrade or buy your first vehicle. Thus, they offer higher loanable amounts. You also need collateral to avail of these two loans.

Personal loans, on the other hand, are more flexible. They are commonly used to fund large one-time expenses, such as home improvements, tuition fees, weddings, or unexpected medical emergencies, without requiring collateral.

So how does the approval process work? Since no collateral is required, lenders like Metrobank assess the risk differently. Your credit score and debt-to-income ratio become key factors in determining whether your application gets approved and what interest rate you qualify for. Keeping these in good standing before you apply can significantly improve your chances.

Why should you avail a personal loan?

Getting a personal loan offers plenty of benefits for your finances:

1. Covers a wide range of needs. A personal loan can be used for multiple purposes, so it can help you manage cash flow better, especially in times of emergency.
2. A safer alternative to high-interest debt. Personal loans with low interest rates give you a safer, more affordable alternative to high-interest debt, so you can confidently fund large expenses without falling into a cycle of unmanageable repayments.
3. Protects your savings. Personal loans can also help you avoid dipping into your life savings for unexpected expenses.
4. Helps you get out of debt faster. A personal loan can also be a way for you to clear your debt so you can start building your savings.

Overall, when a personal loan is managed correctly, it can help you improve your finances.

Five ways to manage a personal loan

Personal loans could have a positive impact on one’s finances if managed properly. So, here are tips on how to manage a personal loan:

1. Use the loan wisely. Be sure to use your personal loan for its intended purpose. Avoid taking on a loan for unnecessary expenses that could have been managed within your regular budget.
2. Borrow only what you need and can comfortably repay. While Metrobank evaluates your financial capacity, it’s best to know how to manage debt, your available income, and your monthly expenses.
3. Create a budget. Since the personal loan is an added expense, create a plan for how you will fit all your expenses into your budget, so you don’t fall short.
4. Be mindful of your expenses. Do your best to follow your budget every month. Try to minimize unnecessary expenses to stay on track.
5. Pay on time. Personal loans are paid via auto-debit arrangement but make sure that your account has sufficient funds to avoid late payment fees.

What to prepare before you apply

Before submitting your application, make sure you meet Metrobank's eligibility requirements:

• Filipino citizen
• At least 21 years old at the time of application and not older than 65 years old upon loan maturity
• Gross annual income of at least PHP 250,000
• An existing credit card
• If employed: regular employment status with your current employer for at least 1 year
• If self-employed: at least 2 years in your current business

Once you're eligible, applying is quick and straightforward—it only takes three easy steps:

• Fill out the online personal loan application form
• Upload a scanned copy or photo of your valid ID
• Submit your online application

All applications are subject to Metrobank's credit evaluation.

Jumpstart your plans with a Metrobank Personal Loan

A personal bank loan in the Philippines could open possibilities for you to improve your quality of life or help you achieve your goals. If you’re sure about your purpose and capability to handle the repayment, don’t hesitate to apply for a Metrobank Personal Loan in the Philippines.

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