Money is one of, if not, the most desired commodity in the market. It is the reason there are so many lending companies and individuals lending money. Not only that, it is also a most lucrative business. Due to the very high demand for money, the choices abound for borrowers. But what is most desirable among borrowers? Which companies or lenders do they seek after? Borrowers are looking for lending companies with low interest loans.
What is low interest loans?
When a borrower ask how much is the interest rate, the figure given by the lending companies though maybe the same, could really differ depending on time frame basis. 20% for example could mean 20% per month or 20% per year. Thus low interest loans are usually loans which interest rate is computed on an annual basis. Since they are computed on an annual basis, the effective rate is much lower compared with those whose rates are given on a monthly basis.
Low interest loans in the Philippines
In the Philippines the basis for evaluating the interest rate of loans is the standard set by the Banko Sentral ng Pilipinas (BSP). Low rate loans are usually those given by banks. Bank lending rate in the Philippines averaged 13.16 percent from 1976 until 2018. As of Aug 28-31, 2018 bank lending rates has high average of 7.1049 and low average of 4.6392 percent per annum.
How to find and get low rate loans
How can a borrower in the Philippines find and get low interest rate loans? The best bet for a borrower in finding low rate loans is from the banking system of the Philippines which numbers 41. There are 22 local banks in the Philippines -2 of which are subsidiaries of foreign banks – and 11 in universal bank system.
The Banko Sentral ng Pilipinas (BSP) releases updated online data on Interest Rates of Banks. While above figures are a useful guide, they are only indicative rates which may actually be higher. One has to actually verify the rates from the respective bank itself. With the BSP list rate as a starting guide you can choose the ones giving the lowest rates and proceed to investigate further by simply calling the respective banks.
One draw back however from these low interest bearing bank loans is that banks demand collateral in terms of fixed assets like house and lot. Your next alternative then is to find loans from the different cooperatives in the Philippines which offer higher rates but still lower than most lending companies. You will be required however to become a member and amount of personal loans given is based on total amount of membership fees contributed.