Types of Bank Loans

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 The largest single source of bank income

depends on the amount of its loans.
Loans and deposits complement each
other, as the amount of loans a bank
could extend will depend largely on its
ability to attract and retain large
deposits.
The earning capacity of a bank will be
enhanced when it has a large available
loanable fund.

As to purpose

Commercial
Agricultural
Industrial
Personal
If the proceeds are diverted by the borrower other than
the purpose applied for, the bank reserves the right to
accelerate the loans maturity and call for its payment
at once.

As to maturity
Short term
Medium term (intermediate)
Long term

Call or demand loans are those which are payable upon

call or demand of the lending institution.

As to security
Secured
Unsecured (character loan/clean loan)

Unsecured loans may require a co-maker. In some

cases even secured loans may also require a co-maker.

As to method of payment
Self-liquidating
Non-self-liquidating

Self-liquidating loans are easier to pay.

As to method of release
Installment
Lump Sum

Sometimes, the installment release is resorted to in

order to control use of the proceeds.

As to source

Bank Credit
Mercantile Credit
Private Credit
Public Credit

Sometimes, the installment release is resorted to in

order to control use of the proceeds.

Commercial Loan
A debt-based funding arrangement that a
business can set up with a financial
institution. The proceeds of commercial
loans may be used to fund large capital
expenditures and/or operations that a
business may otherwise be unable to
afford.

Industrial Loans
granted to finance the establishment,
rehabilitation, development, expansion and
operation of industrial projects, enterprises
engaged in the purchase, processing and
transformation of raw materials, manufacture
of goods, as well as the marketing thereof,
including the purchase of industrial machinery,
equipment and implements used or to be used
therein, and loans granted to Participating
Financial Institutions (PFIs).

Consumer Loan
loan made by the lender to a person
which is payable in installment for which
a finance charge is or may be imposed.
This term includes credit transactions
pursuant to an open-end-credit plan
other than a seller credit card. RA#7394

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Based on the latest central bank data, the

residential real estate loans continue to
dominate consumer loans. As of endDecember, the total residential real estate
loans amounted to P320.450 billion, up
21.14 percent year-on-year.

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BSP noted that figures suggest a notable

increase in the purchase or rent of
residences near business districts by young
professionals, of luxury homes
(condominiums) by high-income
expatriates, and of real estate properties
for the use or investment by overseas
Filipinos.

 Other consumer loans such as automotive

loans and credit card receivables also
showed growth last year. Auto loans
totaled P186.323 billion, 16.54 percent
more over 2012 numbers. Credit card
loans, in the meantime, rose 5.85 percent
to P157.394 billion.

Loanable Amount
Minimum loan amount of P500,000
Up to 80% of appraised value of property
Interest Rate
Prevailing rate at the time of loan release; fixed
for 1 year to 5 years at the borrower's option,
subject to review thereafter
Purpose and Maximum Term of Loan
Lot Purchase - 15 years
Purchase of house and lot, townhouse,
condominium - 20 years
House construction and improvement - 20 years

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Personal Loans
Personal loans are used for paying
immediate needs like tuition fees, debt
consolidation and to some buy gadgets.
Like most loans, a personal loan bears an
interest rate agreed upon by two parties,
the lender and the borrower. Interest
Rates for Personal Loans in the
Philippines vary per lender, and are
usually quoted on a monthly basis.

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