The Bangko Sentral ng Pilipinas (BSP) has issued a circular extending the maximum repayment period for salary-based consumption loans to seven years from the current three years.<\/p>\n
Under Circular No. 1239, series of 2026, issued on June 18, the extension covers salary-based general-purpose consumption loans (SBGPCLs) or unsecured loans used for immediate to short-term needs like education, healthcare, emergencies, travel, household needs and other personal expenses.<\/p>\n
These are typically repaid through salary, pension, or other forms of stable cash flow.<\/p>\n
Previously, SBGPCLs were generally limited to three years and could be extended to five years only in meritorious cases.<\/p>\n
The BSP said that under the circular, the seven-year period is the maximum allowable tenor, not a fixed loan term.<\/p>\n
Banks and other BSP-supervised financial institutions, however, must still determine the actual repayment terms based on the borrower\u2019s capacity to pay.<\/p>\n
The BSP said this includes sources of repayment, employment and credit history and the nature and purpose of the loan.<\/p>\n
For financing longer-term or non-consumption needs, borrowers may consider other types of loans such as housing, motor vehicle, or credit card loans, the BSP said.<\/p>\n
The central bank clarified that these loans are outside the scope of SBGPCLs and are not covered by the seven-year maximum limit even if repayments are made through salary deduction or similar arrangements.<\/p>\n
Borrowers are also encouraged to explore refinancing options through facilities offered by financial institutions such as the Government Service Insurance System and the Social Security System.<\/p>\n
“The longer repayment period makes payments more manageable. At the same time, the seven-year limit serves as a safeguard against excessive borrowing,” the BSP said in a statement Friday.<\/p>\n
The BSP said it continues to work with the Department of Education and partner financial institutions to promote financial literacy and responsible borrowing. (PNA)<\/p>\n","protected":false},"excerpt":{"rendered":"
Borrowers can now spread loan payments over a longer period under the updated salary-based lending guidelines.<\/p>\n","protected":false},"author":73,"featured_media":264734,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[19565],"tags":[],"class_list":["post-264733","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business-today"],"zyndk8_nxtgen_metadata":{"nxtgen_comments":[{"9544":"pautang \ud83c\udfe6\r","9545":"edukasyon \ud83d\udcd6\r","9546":"sana may protection against predatory lending practices \ud83d\udee1\ufe0f\r"}]},"yoast_head":"\n