PF - Mid - W6

1.25% to 1.8% per month or 24-42% per year

Rate of Bank Personal Loan

3% per month or 36-42.58% per year

Rate of Credit Card (Revolving)

10-10.5 % per year

Rate of SSS/Pag-IBIG Salary Loan

3% to 4% per month

Rate of Pawnshop Loan

20% per cycle or 200%+ nominal

Rate of Informal Loan "5-6"

Personal Loan (Installment Credit)

Lump sum from a bank or lender, repaid in fixed monthly installments —

typically used for a specific, one-time need

Credit Card (Revolving Credit)

Reusable credit line up to a set limit

Interest often about 24% to 42% a year if not paid in full

Salary Loan (Payroll-Linked):

Borrowed against future salary (SSS, Pag-IBIG, employer, cooperative)

Usually lower interest

Auto-deducted from pay

Buy Now, Pay Later (BNPL)

fast-growing short-term installment option

Shopee SPayLater, Atome, BillEase

Nominal Rate

the stated annual rate before compounding

Formula: i x m

Effective Interest Rate

the true annual cost after compounding

Formula: (1 + i)^m - 1

Credit Card Statement

It is a monthly summary from your card issuer showing your purchases, payments, balance, and due date

Statement Date (Closing Date)

Billing cutoff

Due Date

Deadline to pay before finance charges apply

Total Amount Due

The full balance. Pay this in full to avoid any interest.

Minimum Amount Due

Smallest payment to stay in good standing. Paying only this lets interest keep building on the rest

Available Credit Limit

How much credit you have left

Finance Charge

Interest already charged on a carried-over balance

Snowball Method

Pay off the debt with the SMALLEST balance first, while making minimum payments on the rest

Quick wins, motivation, discipline

May pay more total interest

Borrowers who need momentum

Avalanche Method

Pay off the debt with the HIGHEST interest rate first, while making minimum payments on the rest

Mathematically best, lowest total interest

First win may take longer

Borrowers who want to save the most money

Credit Information Corporation (CIC)

• the Philippines' central credit registry, created under the Credit Information System Act

• Collects borrower data from banks, lending companies, and microfinance institutions.

• Its data feeds credit scores and reports that lenders use to decide whether and at what rate to approve a loan.

  
  

  
  

Good Debt

Borrowing for something that grows in value or earns income: business loan, education loan, home loan

Bad Debt

Borrowing for consumption or depreciating items: card debt for gadgets, loans for vacations or luxury items