How To Calculate The Fee For Cash Loans?

Regardless of all the risks involved, you’ll have to admit that cash loans are probably the easiest and fastest way to get money. However, what many lenders choose to omit are high interest rates compared to traditional bank loans.

So, when a deal sounds too good to be true, then probably it’s is, and this applies explicitly to cash loans. On the other hand, if you are a financially responsible person, then cash loans can be an excellent way to solve some money issues until the salary arrives.

Therefore, in this article, we will try to explain how much does cash loan costs in the Philippines and what fees are associated with it.

Cash loan’s condition and terms

If you want to take advantage of cash loans in the Philippines, then you should have a basic understanding of the costs and how the payments are calculated. Fortunately, nowadays, there are a number of companies to choose from, both public and private.


They all offer different terms and conditions, such as the minimal and maximum amount, tenure, fees, and interest rates. But, for average people is quite challenging to understand all those percentages, potential charges, and hidden fees surrounding cash loans.

For example, if your salary is Php 30,000, then your cash loan would be a total of Php60,000, which is 2x your monthly salary. Next, you will have to determine what your repayments will be, as well as the length of time that you are given to repay your loan.

If the lender offers you three months to repay your loan, then your installments will be higher compared to a 12-month timeframe. The next comes the interest, which is 0.5833% monthly, or 7% per year. The lending company determines the interest rates based on numerous financial factors, such as prevailing market rates, and allowable market rates.

Repayment period

The repayment period should be taken seriously, and in agreement with the lender, you will be given a specific time to repay your loan. Keep in mind that loan amount, interest rates, and tenure are determined before you sign a contract.

What Are The Pros Of Getting Cash Loans

Some companies offer reasonable interest rates, but they also charge other fees that are deducted from the gross loan amount. For example, you may expect to see a processing fee of 1%, which is added to your initial loan amount.

On the other hand, if you fail to repay the loan on time, then you may face certain consequences. Some lending companies increase the interest rate in that case, and it can reach 16% of the gross loan.

Let’s take a look at the following example:

If you borrow Php2,000 with CARD Bank, Inc., which often targets people with low income, their contractual rate is 4.32%, while the effective rate is 4.47%, which makes a total of Php560. You will repay the loan over 50 weeks, paying each week Php55.

But, when you multiply Php55, 00 with 50 weeks, you will be given a total of Php2,750 or interest of Php750, which is entirely different from the stated total interest of Php560. So, this is something to keep in mind when borrowing money.