5 essential loan tips

5 Essential Loan Tips for First-Time Borrowers in the Philippines

Applying for a loan can be overwhelming, especially if it’s your first time. If you’re seeking a personal loan or something similar, understanding the process, and making informed decisions are important, so here are some essential tips to guide you!

Top 5 Loan Tips

1. Know Where To Borrow

When choosing who to borrow money from, be wary of informal lenders or loan sharks. These unregulated lenders may promise quick approvals, but they often come with extremely high interest rates and hidden fees. To protect yourself, always choose reputable and regulated financial institutions, such as established financial institutions or banks, credit unions, or licensed online lenders for your borrowing needs.

2. Have a Clear Purpose 

Before applying for a loan, ask yourself: “Why do I need this money?” Whether it’s for consolidating debt, covering medical expenses, business expansion, or financing a home improvement project, knowing your purpose will help you select the best type of loan that aligns with your goals.

3. Set a Loan Amount

Have an idea of how much money you need, and avoid borrowing more than that. It’s best to calculate the exact amount you’ll need for your specific purpose to avoid overborrowing, unnecessary interest payments, and financial strain.

4. Prepare Complete Loan Requirements

Prepare the basic loan requirements in advance to streamline the application process. Submitting complete requirements will also help speed up the approval process since your lender will have all the information they need when checking your application. 

While the requirements vary per lender, here are some of the usual items you’ll need to prepare:

  • Valid government-issued  IDs
  • Proof of income / Bank statements
  • Employment history

5. Keep Interest Rates in Mind

Interest rates significantly impact the total cost of your loan. A slightly lower rate can save you money over the loan term, so it’s best to borrow from formal lenders, like SB Finance, that are registered with the Securities and Exchange Commission (SEC), and supervised by the Bangko Sentral ng Pilipinas (BSP). Borrowing from these regulated formal lenders is a way to protect yourself from paying unreasonable interest rates.

It’s also best practice to calculate how much you’ll need to pay back with the interest rate, so you can have an idea of how much money, and for how long you’ll need to set it aside for monthly payments.


As a first-time borrower, educate yourself about the loan process, explore reputable lenders, and make informed decisions. Remember, a loan is a financial commitment, so choose wisely and stay informed throughout the borrowing journey.

If you need help with your loan application, reach us via email (zuki@sbfinance.com.ph), our Customer Service hotline at (+632) 8887-9188, or our Facebook Page (@SBFinancePH).
If you want an SB Finance Goal Consultant to guide you toward achieving your financial goal, simply answer this form, and we’ll be sure to reach out to you!

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