Image via WikipediaFinancial IQ Philippines Quick Hit(s):
Most of us have been offered loans by different institutions. Unless you can recover the interest from the loan, I suggest you think twice before taking out this type of loan. As can be seen from the one of the leading institution's offer, the loan's annual interest rate ranges from 21% to 27%. Yes, this is very high.
Just think about it, in savings account, you typically get 1% interest per annum (for a deficit of appoximately 20% to 26%). For time deposits, typical range is around 4% per annum (for a deficit of approximately 17% to 22%).
One of the flyers I got from the recent Franchising Expo 2011 in SMX is a Personal Loan from one of the leading financial institution. This type of loan is typically non-collateral and can be used for home improvements, purchase of retail items, medical expenditures, trips, etc. Reading the front portion of the flyer, seems like the rate is around 1%. As it turned out, the various interest rates are:
| Term | Interest Rate / Month | Effective Rate / Year |
| 6 | 1.30% | 26.27% |
| 12 | 1.25% | 26.63% |
| 18 | 1.25% | 26.76% |
| 24 | 0.99% | 21.37% |
| 36 | 1.25% | 25.98% |
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