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This three-letter abbreviation stands for the annual percentage rate and relates the amount of interest you are expected to pay in addition to the amount you borrowed. Annual percentage rates can vary dramatically, depending on the lender you are dealing with and the kind of loan you are applying for. Personal loans usually offer a lower APR than salary loans in the Philippines.

Early Repayment Charges

Some lenders include a clause within the terms of conditions of your loan agreement that stipulates you can pay off your loan early. There is often an additional charge for doing so, but this should be clearly stated by the loan provider, either on their website or in writing.

Credit Score

This works slightly differently in different parts of the world but the Philippines does have a central checking agency who gather financial information on citizens who use banks, loan providers and other lenders. Generally, the higher your score, the better your chances of securing a good interest rate. This also relates to how much lenders are likely to offer you.

Default Charges

If you miss a scheduled repayment to your lender, more often than not, you will trigger an automatic default charge, which increases the amount you owe overall. This practice can seem unfair to some people, but it was established to prevent lenders losing money and to ensure that missed payments are a rarity.

Debt Consolidation

This term refers to the practice of amalgamating all of your debts by paying off multiple lenders, using credit from a single source. There are specific debt consolidation loans available from lenders in the Philippines, though interest rates and terms can vary, so always check to ensure you aren’t paying more than you need to be.


This term doesn’t relate to opera in this context, it simply means how often your payments will be taken. For example, weekly, monthly or quarterly. Most companies will ask for a payment each month, it’s quite rare to find companies who ask for weekly payments, though some salary loan lenders can do this for certain products they offer.


The Securities and Exchange Commission is the governing body that manages and regulates the finance industry in the Philippines. They exist to ensure lenders operate within the law and to protect the public from exploitation and unethical practices. If you have any concerns about lenders, always check with the SEC to ensure they’re genuine. Unfortunately, there are still some illegal companies operating in this part of the world and dealing with them can lead to serious problems.


This term relates to when you will begin to pay back the amount of money you borrowed. Some lenders will allow their customers to enjoy a deferment period of up to 3 months before they are required to begin making regular payments. Loan payment deferment options will be clearly stated by your lender if this is a potential option for you.

Payment Holiday

Similar in some ways to deferment, a payment holiday allows you to request a break from having to make your repayments. Not all lenders will offer this, though some can be more flexible. Customers often request payment holidays during times of financial stress caused by emergencies or unexpected outgoings. This is something that is usually permitted once or twice, but not something customers can do regularly. Payment holidays may also involve additional charges.


This stands for payment protection insurance. Though there has been a lot of negative stories about this recently, it can be useful for some customers. It was designed to prevent people falling further into debt by providing for periods of unemployment, sickness or other unforeseeable incidents. You are not legally obliged to take this, and you can usually choose to opt out when you sign up.

Loan Calculator

Some companies have an integrated loan calculator on their website. This allows you to see how much you can borrow, how long it will take to pay back and also the interest rate that you are likely to be offered. Most of these calculators are just a guide and the actual rate you will be offered can vary depending on things like credit rating and occupation.


Applicable in the United Kingdom, this stands for county court judgement and relates to people who have been unable to pay what they owe. This can affect your overall credit rating and can prevent you from being able to get a mortgage.

Credit Reference Agency

In the Philippines, the main credit checking agency is Trans Union Information solutions. They operate in a similar way to UK companies such as Equifax and Experian. They essentially hold information on transactions and borrowing that help lenders make decisions when it comes to approving or refusing applications.

Personal Loan

A personal loan is usually offered over a period of one to five years in amounts that range from around $500 to £10000. Interest rates can vary from as low as 6 or 7 percent but can also be much higher. The amount you can potentially borrow and the interest you can expect to pay will depend on your age, income and other factors such as how many addresses you have had.

Salary Loan

Also known as a pay day loan in the UK, this type of short-term lending was designed to allow people to make ends meet when they are waiting for their wages to paid. The interest rates on loans like this are usually very high, as an incentive for customers to pay off what they have borrowed as soon as possible to avoid the amount becoming unmanageable. Salary loans are for short term use only and should never be used as a substitute for a regular income.


Before you decide to borrow, always make sure that you understand the terminology and language the lenders use. If you are unsure of the meaning of any of the words, never be afraid to ask your loan provider for an explanation.

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