Term Loan or Equity Loan in the Philippines – What is it For and How Do You Get One?

Term Loan or Equity Loan in the Philippines – What is it For and How Do You Get One?

Curious to know how and where you can get a term loan or equity loan in the Philippines? How are these two types of loans different, and which one should you get for your specific financial purpose? Read on to find out.

What is a term loan?

A term loan is a loan from a bank or a financial institution with a specified principal amount and repayment schedule. There is a fixed date when the loan must be paid in full, also known as the maturity date.

Term loans may have fixed or variable interest rates. Most term loans also mature within 10 years.

What are term loans for?

Term loans are usually to finance a business expansion or to diversify or modernize a business project.

When business owners apply for a term loan, it’s usually to fund a piece of equipment or a company vehicle, or to purchase a new office or business location.

Proceeds of a term loan can also be used to add working capital to your business or if you want to franchise a business.

It helps spread the impact of a significant expense in smaller installments over a fixed period.

How much can you borrow with a term loan?

Banks and other financial institutions in the Philippines can let you borrow anywhere between 100,000 PHP and 20,000,000 PHP.

The loan amount is given in full and credited to the borrower’s deposit account.

If it’s a short-term loan, it usually must be fully paid within a year. For long-term loans, the payment period can be anywhere between 5 to 15 years. This will depend on the bank or financial institution.

The downside of term loans

While they are very beneficial and usually necessary for business operations and growth, they do come with a cost to borrowers.

Aside from the monthly payments, which are expected to be quite huge when you borrow a big sum of money, you will also need to pay interest and closing costs.

There may also be a down payment that must be settled if you are purchasing real estate for your business expansion.

Where can you apply for a term loan in the Philippines?

Bank Loanable Amount Repayment Period
BPI 500,000 PHP or up to 70% of collateral’s appraised value 1 to 10 years
BDO 1,000,000 PHP to 20,000,000 PHP 1 to 3 years for short-term loans

3 to 5 years for long-term loans

Maybank 500,000 PHP to 30,000,000 PHP 1 year for short-term loans and 3, 5, 10, or 20 years for long-term loans
Landbank of the Philippines 300,000 PHP to 2,000,000 PHP 1 year for short-term loans and 5 years for long-term loans
CTBC 500,000 PHP to 50,000,000 PHP Up to 180 days for short-term loans and up to 10 years for long-term loans


BPI offers both short-term and long-term loans. You can borrow from 500,000 PHP or up to 70% of your collateral’s appraised value. Payment period is anywhere from 1 to 10 years.

BDO’s short-term loans can be paid within 1 to 3 years, and long-term loans can be paid over 3 to 5 years in monthly or quarterly installments.

Those who wish to apply for a term loan with BDO must be a Filipino citizen and between 18 and 65 years old upon loan maturity.

They must be entrepreneurs with at least 3 years of profitable business operations or professionals, employees, or Overseas Filipino Workers with at least 3 years stable income.

Maybank Philippines offers short-term loans which can be paid within 365 days, as well as long-term loans with repayment periods of 3, 5, 10, or 20 years.

Single proprietors, partnerships, or corporations can apply for a Maybank term loan. The loanable amount is anywhere between 500,000 PHP and 30,000,000 PHP.

You can also apply for a term loan through Philippine National Bank. Their short-term loans can be paid within a year, and their long-term loans can be paid within 2 to 7 years.

Landbank of the Philippines offers term loans to borrowers whose projects are in the services, trading, manufacturing and agri-business sectors.

CTBC Bank also has term loans that you can take advantage of, and you can borrow a minimum amount of 500,000 PHP and a maximum amount of 50,000,000 PHP.

Their short-term loans are payable within 30, 60, 90, or 180 days only, and their long-term loans are payable up to 10 years. Interest rates can be fixed up to 5 years.

What is an equity loan?

A home equity loan is also sometimes referred to as a term loan because the loan amount is given as a lump sum and repayment is fixed over a period of time. It has a fixed interest rate and a set payment amount every month.

It’s also a type of second mortgage because you can make payments over a period of time using your house as collateral.

How much can you borrow with an equity loan?

The amount you can borrow with an equity loan depends on how much home equity you already have. The higher the equity, the larger the loan amount you can qualify for.

Because you are using your home as collateral, it’s a more secured type of loan. It’s also easier to qualify and get approved for a loan.

The downside of equity loans

The disadvantage of having your house as a collateral is that you risk losing it due to foreclosure should you fail to make your loan payments. In addition, if you suddenly decide to sell your house for some reason, you need to fully pay off the loan just like your mortgage.

If you don’t have enough home equity, you will either be approved for a lower loan amount or you may not get approved at all.

Long-term repayments can also be a drawback, especially if the purpose of your equity loan is to fund a minor or inexpensive undertaking. You will be paying years of interest and a mortgage for something that could easily be paid in months.

Where can you apply for an equity loan in the Philippines?

You can get an equity loan from your bank or any other financial institution that provides this type of loan.

Security Bank’s home equity loans offer low interest rates starting at 7% and are payable within 5 years.

Maybank Philippines lets you borrow up to 60% of the appraised value of your home or up to 5,000,000 PHP, whichever is lower.

You can take out a home equity loan for a minimum of 500,000 PHP. If your collateral is a condo unit, a townhouse, or a residential house and lot, you can get a maximum repayment period of 10 years.

Home Equity Loan Requirements:

  • valid IDs
  • recent photos of the borrower
  • a properly filled out housing loan application form
  • certificate of employment
  • Income Tax Returns for the last two years
  • financial statements
  • business registration or permit ( for entrepreneurs / business owners )

If your collateral is your house and lot or condo unit, you will also need to submit a copy of your Tax Declaration, Transfer Certificate of Title, or Condominium Certificate of Title as well.


Both term loans and equity loans provide specific benefits to the borrower. Term loans are useful when you need a big amount of money to finance a business or even a personal project. On the other hand, home equity loans are useful when you have significant equity in your house.

There are many types of loans available for different kinds of financial needs. Make sure that a term loan or an equity loan is what you need before you apply for one. Sometimes an unsecured loan or even just a simple credit card can be a better fit.