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Calculate your monthly payment, EIR, total interest, service fee, DST, and the real cost of any Philippine loan — diminishing or flat rate.
Diminishing balance vs. flat/add-on rate
With diminishing balance, interest each month is charged on your outstanding balance — not the full original amount. As you pay principal, interest shrinks. This is how banks compute housing and most personal loans.
Flat/add-on rate calculates interest on the full original principal for the entire term, then divides equally. All Philippine car loans and most consumer loans are quoted as add-on rates — which is why the EIR is always much higher than the stated rate.
Rule of thumb: Flat/add-on rate × 1.8 ≈ diminishing equivalent (for 2–3 year terms). E.g., 1.5% monthly add-on ≈ 2.7% monthly diminishing. Always compare by EIR — not the quoted rate.
Service fees (plus 12% VAT if the lender is VAT-registered) and DST (₱1.50 per ₱200 of loan, per NIRC Section 179 / TRAIN Law) are deducted upfront. DST is not subject to VAT — it is a government levy. Monthly payments are still based on the full loan amount, which is why EIR always exceeds the contractual rate.
Why EIR matters (and why banks must disclose it)
Under BSP Circular No. 730 and the Truth in Lending Act (RA 3765), all BSP-supervised lenders must disclose the EIR to borrowers before signing. EIR is computed using the discounted cash flow (IRR) method — not a simple add-on or straight-line calculation.
EIR is always higher than the stated rate because it incorporates upfront fees, DST, and the interest computation method. When comparing loans, use EIR — not the monthly add-on rate or annual contractual rate — to find the genuinely cheaper offer.
Pag-IBIG housing loan rates (2025)
Pag-IBIG rates are based on the repricing period — how long your rate is locked before it adjusts. After the repricing period ends, your rate resets to the prevailing Pag-IBIG rate at that time. It is not fixed for the entire loan term.
| Repricing Period | Annual Rate |
|---|---|
| 1 year | 5.75% |
| 3 years | 6.25% |
| 5 years | 6.50% |
| 10 years | 7.125% |
| 15 years | 7.75% |
| 20 years | 8.50% |
| 25 years | 9.125% |
| 30 years | 9.75% |
Pag-IBIG special: ≤₱580,000 socialized housing qualifies for 3.0% p.a. Pag-IBIG loans have no prepayment penalty. Source: HDMF / Pag-IBIG Fund, 2025.
Typical Philippine loan rates at a glance
| Loan Type | Rate | Method |
|---|---|---|
| Personal (bank) | ~1.2–2.1% monthly add-on | Flat / Add-On |
| Personal (digital / GCash, Maya) | ~1.6–6.6% monthly + 3% fee | Flat / Add-On |
| Car loan (bank) | ~4.6–7.0% annual add-on | Flat / Add-On |
| SSS salary loan | 8% p.a. (effective Jul 2025) | Diminishing |
| Pag-IBIG housing | 5.75–9.75% p.a. | Diminishing |
| Commercial bank housing | ~6.5–8.5% p.a. (repriced) | Diminishing |
Rates shown are general benchmarks and vary by lender, credit profile, and market conditions. Always request the official disclosure statement (mandated by BSP Circular 730) before signing.