A Salary Loan is another way to finance your business other than asking a relative or a friend. If you're an employed worker and earning a decent salary then this might be a good option for you. In the Philippines, banks lend for as low as 30,000 pesos up to a million peso.

Salary loan terms are usually flexible from 12 months to 36 months. They also take only a few days to get approved (about 3 to 7 banking days). Depending on the payment term you choose, interest rates vary from (estimated) 1% to 2% monthly or about 12% to 15% annually. Having said that, depending on the loan term you choose and the amount you applied for, your monthly amortization can vary between an estimated amount of 1500 pesos to about 100000 pesos monthly. Let's say you managed to apply for a loan for 50000 pesos for 12 months at 1.5% interest. Doing some simple math, 50,000 divided by 12 is 4166.67 add to that say the 18% compounded interest for 1 year is 9000 pesos or 750 pesos per month. So add 4166.67 and 750 pesos would be about 4916.67 per month. If your business

Low Salary Loan Interest Rates

You might want to ask your company if they have a tie-up with a certain bank that offers salary loans. Why? Because banks would usually offer low or lower interest rates if you apply through your company (corporate account) rather than walk-in (private account). I guess this gives them a sense of security because they already know that you're really employed and can pay back your loan.

So if you think that the monthly cashflow from your business will be much higher than the monthly amortization, salary loan is a good option to finance your business.

Who Is Salary Loan Good For?

Now to whom is salary loan good for? For my fellow Pinoys, I think salary loans are good for IT People, people working on a callcenter, or professions that earn more or atleast 15000 pesos salary per month.

The typical requirements for salary loan are a copy of your updated payslip,  Certificate of Employment (COE), Income Tax Return (ITR), and an accomplished application form. Some banks would require you to issue post-dated checks upon loan approval.

Remember, if the purpose of your loan is to earn more money then it's not a bad thing. "Good Debt" as they say.