A monthly payment is only one part of a loan. To understand an offer, write down the cash you receive, the payment dates and the total of all scheduled payments. Then check whether any charges sit outside that schedule.
Start with the amount you receive
The amount shown at the top of an offer may not be the amount paid into your account. Ask whether processing charges, insurance or other fees are deducted before disbursement. A smaller amount received changes the cost of borrowing.
Put the total in pesos
- Stated loan amount
- ₱5,000
- Fee deducted before receipt
- − ₱200
- Cash you receive
- ₱4,800
- Total scheduled repayments
- ₱5,500
- Cost above cash received
- ₱700
₱5,500 − ₱4,800 = ₱700
Assumes on-time payments and no other charges. The deducted ₱200 is already counted. This is not an EIR calculation.
Compare like with like
Use the same amount and repayment period when comparing offers. A smaller monthly payment spread over more months may produce a larger total. Ask for the full schedule, not just the first payment.
The BSP explains that the effective interest rate (EIR) reflects the true cost of a loan. Its calculator requires details from the prospective lender. Do not treat a flat fee percentage as an interchangeable EIR.
Check what changes if plans change
Read the conditions for late payment, early repayment and refinancing. Ask which charges are already included in the total and which arise only in those situations. Keep a copy of the terms before accepting.
If the provider cannot clearly explain the amount received, total repayment and due dates, pause before proceeding. This guide explains comparison concepts; it does not recommend a product.