How Online Loan Interest Is Computed

Most online loan apps in the Philippines use simple interest:

Total Interest = Loan Amount × Daily Rate × Number of Days

Example: ₱10,000 at 0.5%/day for 30 days = ₱10,000 × 0.005 × 30 = ₱1,500 interest. Total repayment: ₱11,500.

The SEC caps interest at 6% nominal per month for loans under ₱10,000. All legit loan apps must disclose the full APR before you sign. See our loan glossary for term definitions.

5 Ways to Reduce Your Loan Cost

  1. Use the 0% first loan promo — most apps offer this. Your first loan is completely free.
  2. Borrow only what you need — ₱5K at 0.5%/day for 30 days = ₱750 interest. ₱10K = ₱1,500.
  3. Choose shorter terms — a 14-day loan costs half the interest of a 30-day loan.
  4. Repay on time — late penalties are typically 1–3% per day on top of regular interest.
  5. Browse multiple apps — rates range from 0.2% to 1.99%/day. Check all offers here.

Calculator FAQ

How do I compute online loan interest in the Philippines?

Multiply your loan amount by the daily interest rate, then by the number of days. Example: ₱10,000 × 0.005 × 30 = ₱1,500. Add that to your principal for the total repayment (₱11,500).

What is the SEC interest rate cap for online loans?

The SEC caps nominal interest at 6% per month for loans under ₱10,000 and effective interest at 15% per month. For a ₱5,000 loan for one month, the maximum interest is ₱300 (6%).

Is 0% interest on first loans really free?

Yes. Legit SEC-registered loan apps offer 0% interest on your first loan — you repay only the exact amount borrowed. No hidden fees. It's a marketing promo to attract new borrowers.

Disclaimer: Calculator results are estimates based on simple interest. Actual lender terms may differ. Always confirm rates and fees directly with the lender before applying.