Salary loans

What is a salary loan?

Financial services market in the Philippines offer suggests residents a variety of credit types: Personal, Consumer, Cash, Quick, Online. However, the salary loan has the most favorable conditions.

Banks suggest salary loan to clients who work in accredited organizations and have an account where they receive payments from the employer.

Also some banks offer this banking product for any SSS retiree (surviving spouse with monthly SSS pension) if payments credited directly to a saving account in this bank.

The employer must meet requirements:

• Must infer a cooperation agreement with the bank
• Philippines registered business
• At least 100 qualified employees

Approval of the application for a salary loan takes from 10 minutes to 5 days. This large gap in the approval period is due to the following reasons: that large banks use digital banking, and small private financial companies use traditional document management.

How do I apply for a salary loan?

At the moment, applying for a salary loan is quick and easy. You are already a customer of the Bank because you have an account here that regularly receives your earned money. This fact makes the application process fast.

Banks that do not have an online service accept applications for salary loan at the office. The package of documents for this type of credit is less than for the rest.

Since the Bank already has all your personal data and an account, you need to confirm your ID with an identity document during your visit to the manager and provide a document confirming that you are working with an employer accredited by the bank.

If the bank can consider your application for a payroll credit online, then the application processing time becomes as fast as possible. A package of documents may simply not be required.

New digital banking technologies allow you to easy apply online 24 /7. You apply directly from home without visiting the office. Instant approving an application, money is usually debited to your account during 10-60 minutes.

How much can you borrow?

By law, lenders can’t approve a credit whose monthly repayments would take up 35% of monthly income and of course they cannot exceed this figure.. Most lenders adhere with even more strict requirements, limiting a credit payment to 28% of monthly income.

As a rule, the maximum amount of the salary loan does not exceed 3 monthly earnings.

A larger salary loan is possible if the credit term is more than 12 months. If you want to take a credit in the amount of 5 of your salaries, then at 15% APRthe credit term should be at least 16 months.
If you want to take a salary loan equal to 10 salaries, then at 15% APR the credit term should be at least 36 months.

What is the best online salary loan?

In the conditions of fierce competition, financial organizations are constantly improving the level of customer service. The best loans are provided by large banks because they can invest in new technologies and thereby reduce the cost of servicing loans.

BDO Network bank suggests a salary loan with an interest rate of 26.27% per annum and with payment periods in the range of 6 -36 months.

Development Bank of the Philippines issues these credits with a rate of 12% per annum and a term of 12 – 48 month.

CTBC Bank (Philippines) Corp suggests salary loan not only to employees, but also to self-employed citizens. The requirements for borrowers are the same as those for other banks. However, we should mention the requirements for the self-employed:

• The business is registered and has been operating for at least 3 yr. for trade or 5 yr. for other industries
• Copy of the latest form BIR 1701 / 1702
• Copy of registration from DTI (not expired)
• Copy of the credit card bills for the last two (2) months
• Copy of Bank account statements for the last six (6) months

Security Bank Philippines increases the comfort of a salary loan and is ready to provide it to employees of accredited organizations at an interest rate of 0.99% per month for a period of 4 days to 3 months. Instant application approval is easy and takes 10 minutes.

Eligibility & Requirements

Eligibility for a salary loan is approximately the same and includes:

• restrictions on the minimum monthly income
• must be for a certain period with a constant status
• must be a Filipino citizen
• with landline.

Requirements if the bank does not provide online service:

• complete application form
• copy of ITR or copy of BIR Form 2316
• copy of ID with photo gave out by the employer (and signature)
• photo of one month payslip (latest).

The terms of the salary loan

In different financial organizations, the terms of a salary loan differ greatly. Some banks have a maximum credit term of 3 months, while others can reach 5 years. Interest rates also range widely from 12% per annum to 35% per annum.

he salary loan is extinguished by automatically debiting the funds that come to your account.

After the credit is approved, you can withdraw cash immediately from any available ATM; just remember that you will be charged a commission for withdrawing cash if you are using another Bank’s ATM.

Required document

If the Bank provides a salary loan online, and you are already registered in the system, then you do not need to provide any documents. After sending the application within an hour, you will receive an SMS notifying you of the result of consideration of your application.

If the Bank does not provide online services, you will have to provide a minimum set of documents, usually confirming that you are an employee of an accredited company, that you receive a certain amount every month and that you have a permanent residence address.