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Debunking Personal Loan Myths: What You Need to Know
Misconceptions about personal loans can cost you. Discover the truth behind 7 common myths, including hidden fees and credit score impacts.
Common Myths About Personal Loans
Many misconceptions surround personal loans, leading borrowers astray. Let's uncover the truth behind these myths and help you make informed decisions. Rates and terms shown are representative. Your actual rate depends on your credit profile and circumstances. This is not financial advice — always read the lender's terms before applying.
Myth 1: Personal Loans Always Have High Interest Rates
BPI Personal Loan
The BPI Personal Loan offers a competitive starting rate of 1.20% monthly, which is far from high. Such rates challenge the misconception that all personal loans are expensive. For those with a good credit profile, this option provides a cost-effective borrowing solution without the need for collateral.
BPI Personal Loan
Personal- APR
- 25.03–28.67%
- Amount
- ₱20k–₱3M
- Term
- 12–36 mo
- Decision
- 2-3 banking days
Myth 2: You Need Perfect Credit for Approval
Tonik Quick Loan - Fast Digital Personal Loans
Tonik Quick Loan breaks the myth that only those with perfect credit can secure a loan. Designed for first-time borrowers, it requires no existing credit history, making it accessible for credit-building. However, the higher 4.20% monthly rate reflects the risk lenders take.
Tonik Quick Loan - Fast Digital Personal Loans
Personal- APR
- —
- Amount
- ₱5k–₱50k
- Term
- 6–12 mo
- Decision
- Instant in-app
Myth 3: All Personal Loans Have Hidden Fees
CTBC Bank Salary Stretch Personal Loan
CTBC Bank Salary Stretch Personal Loan provides transparency with no separate processing fees, countering the myth of hidden charges. Its competitive add-on rates and multiple disbursement options offer straightforward terms.
CTBC Bank Salary Stretch Personal Loan
Personal- APR
- —
- Amount
- ₱20k–₱2M
- Term
- 6–36 mo
- Decision
- within 5 banking days
As we move to more flexible options, consider the unique needs of freelancers and self-employed individuals.
Myth 4: Freelancers Can't Get Personal Loans
SB Finance Personal Loan
SB Finance accommodates freelancers and self-employed individuals, disproving the myth that personal loans are out of reach for them. Despite a higher APR of ~39.43%, the accessibility this loan offers makes it viable for non-traditional earners.
SB Finance Personal Loan
Personal- APR
- 39.43%
- Amount
- ₱30k–₱3M
- Term
- 12–36 mo
- Decision
- 1-3 business days
Myth 5: Longer Loan Terms Are Always Better
RCBC Pasado Loan
RCBC Pasado Loan offers up to 60-month terms, yet longer loans can mean more interest paid over time. Consider your repayment capacity to avoid unnecessary interest costs.
RCBC Pasado Loan
Personal- APR
- 19.0–34.0%
- Amount
- ₱20k–₱5M
- Term
- 3–60 mo
- Decision
- fast processing
Myth 6: You Can't Get a High Loan Amount Without Collateral
UnionBank Personal Loan
UnionBank Personal Loan offers up to ₱2 million without collateral, proving that substantial loans don't always require assets as security. Its low 1.26% monthly rate further enhances its appeal for high-value borrowers.
UnionBank Personal Loan
Personal- APR
- 25.0–36.0%
- Amount
- ₱20k–₱2M
- Term
- 12–60 mo
- Decision
- 3-5 banking days
Myth 7: All Banks Offer the Same Loan Terms
BDO Personal Loan
BDO Personal Loan highlights that not all banks provide identical terms, offering a predictable ACR range of 25.98-26.76%. This consistency in pricing makes it a reliable option for borrowers seeking stability.
BDO Personal Loan
Personal- APR
- 25.98–26.76%
- Amount
- ₱10k–₱2M
- Term
- 6–36 mo
- Decision
- 5-7 banking days
Understanding these myths can save you money and stress. What actually matters is aligning your financial needs with the right loan terms and rates. Use this knowledge to navigate personal loans more effectively.
