7 Responsible Borrowing Practices Every Filipino Should Abide By

Given the challenges many Filipinos face in managing expenses and pursuing opportunities, borrowing has now become a practical part of everyday financial planning. Whether it’s covering unexpected costs or taking the first step toward a business idea, knowing how to borrow responsibly can make a significant difference. That said, not all borrowing options are the same, so choosing the right loan with favorable terms is crucial.

When it comes to finding loans that fit your needs, EastWest is one of the country’s most trusted lending partners. EastWest loans can both cover financial needs and enable opportunities, offering a reliable way to access funds for any purpose you may have. However, borrowing money also comes with responsibilities, and doing so without a plan can lead to unnecessary stress and financial strain. That’s why if you’re considering taking out a loan, it’s helpful to be aware of the right practices. Here are some responsible habits every Filipino borrower should adopt to avoid common debt pitfalls.

1. Borrow Only What You Truly Need

Before taking out a loan, calculate exactly how much money you require and avoid borrowing extra “just in case.” Every peso borrowed comes with interest, so limiting your loan to what you truly need keeps debt manageable and repayment stress-free. 

It also helps to make sure the loan you’re considering can fully cover your intended costs. For example, EastWest Personal Loan allows you to borrow anywhere from PHP 25,000 to PHP 3 million, making it versatile for both small needs and larger goals. By planning carefully and choosing the right loan, you can borrow confidently without overextending yourself.

2. Check Your Repayment Capacity

Take a close look at your monthly income and expenses to determine how much you can realistically set aside for loan repayments. Consider all regular bills, living costs, and other financial obligations to ensure you can comfortably meet your monthly dues. To make planning easier, EastWest provides a loan calculator for all loan types, allowing you to see how much your monthly payment would be based on your intended loan amount and repayment term. This helps you choose terms that fit your budget and keep repayments manageable throughout the life of the loan.

3. Understand the Loan Terms

Once you’ve assessed your repayment capacity, it’s equally important to understand the specific terms of your loan, since every loan comes with its own interest rates, repayment schedules, and fees. Reviewing these carefully before committing is essential to avoid surprises and to plan your finances accurately. In particular, look for loans that offer flexible terms. EastWest Personal Loan, for one, allows you to choose a repayment period from 12 to 60 months, giving you the freedom to set a schedule that fits comfortably within your finances.

You should also be clear about what the loan can be used for. EastWest Auto Loan, for instance, is available for both new and pre-owned vehicles. This means that even if you opt for a used car to save on expenses, the auto loan can still support your purchase. Taking the time to understand your options in advance makes borrowing more predictable and less stressful.

4. Opt for Loans With Manageable Interest and Payment Terms

Interest rates have a big impact on your total repayment, so it’s crucial to compare options and choose a loan with rates that suit your financial situation. This is especially important for long-term projects, such as building your dream home, where keeping monthly payments manageable is key to staying consistent with repayments.

To support this, EastWest Home Loan lets you stretch your payments up to 30 years, making monthly amortizations easier to handle while also offering the option to select fixed-rate terms for added stability. Choosing loans with lower interest or manageable monthly payments ensures you can repay comfortably without compromising other financial priorities.

5. Stick to a Repayment Plan

Once you secure a loan, commit to a clear repayment schedule and consider setting reminders to avoid missing deadlines. Timely repayment not only helps you avoid penalties and additional interest but also builds a positive credit history. At the same time, make use of any tools your lender provides to simplify managing your loan. For example, with an EastWest loan, you can use the EasyWay app to monitor payment schedules, interest rates, and remaining balances. Having all this information at your fingertips makes it easier to stay on top of repayments at all times.

6. Be Cautious When Taking Multiple Loans

Having more than one loan can be manageable, but only if you’re confident you can meet all repayments without stretching your budget. Carefully calculate your obligations to ensure each payment fits comfortably within your finances. For instance, combining a personal loan for home improvements with an auto loan for your vehicle can work if your budget allows. Before making a decision, take advantage of tools like EastWest’s loan calculators to see the combined impact of multiple loans on your monthly payments, helping you get a clear picture of your overall financial obligations.

7. Maintain Transparency with Your Lender

If you anticipate difficulties in repayment, reach out to your lender as early as possible. Many institutions are open to discussing flexible arrangements or restructuring options to help you stay on track. Being transparent not only helps you manage potential financial strain but also demonstrates accountability, which can strengthen your relationship with your lender and make future borrowing easier.

Responsible borrowing starts with careful planning, understanding your limits, and making informed choices to keep debt manageable. By following these practices, you can turn loans into helpful tools for bridging financial gaps or pursuing opportunities rather than simply taking on a financial burden. And with trusted options like EastWest’s loan offers, you’ll have all the support you need to borrow wisely and stay in control of your finances.