How to Calculate Loan Monthly Amortization in the Philippines — Complete 2026 Guide (Free Calculator)

Whether you're taking out a personal loan, buying a car, applying for a Pag-IBIG housing loan, or borrowing from SSS, the single most important number you need to know before signing anything is your monthly amortization — the fixed amount you'll pay every month until the loan is fully paid. This guide explains how Philippine loan amortization works, the key differences between loan types, and how to use a free calculator to get your exact figures in seconds.

The Standard Amortization Formula

Philippine banks and lenders use the standard amortizing loan formula: M = P × [r(1+r)^n] / [(1+r)^n - 1]. Where M is your monthly payment, P is the principal (loan amount), r is the monthly interest rate (annual rate ÷ 12 ÷ 100), and n is the number of months. This formula gives you a fixed monthly payment that covers both principal reduction and interest charges every month.

Philippine Loan Types and Their Interest Rates

Personal Loans

Personal loans from Philippine banks typically carry interest rates of 1–3% per month, or 12–36% per year on a diminishing balance basis. Major banks like BDO, Metrobank, and BPI offer personal loans at rates around 1.2–1.8% per month. Online lenders like Tonik, CIMB, and Robinsons Bank offer competitive rates. Always compare the effective interest rate (EIR), not just the advertised monthly rate.

Car Loans

Philippine car loans are typically quoted using the 'add-on rate' method, which is different from diminishing balance. An add-on rate of 4.5% per year means you pay 4.5% of the original loan amount in interest each year — regardless of how much you've already paid down. This makes add-on rates more expensive than they appear. The equivalent diminishing balance rate for a 4.5% add-on is roughly 8–9% per year.

Housing Loans (Bank)

Bank housing loans in the Philippines currently range from 6–9% per year on a diminishing balance basis. The rate is usually fixed for the first 1, 3, or 5 years, then adjusts to the prevailing market rate. BDO, RCBC, Security Bank, and East West Bank are among the most competitive housing loan providers as of 2026.

SSS Calamity and Salary Loans

SSS salary loans have a fixed interest rate of 10% per year on a diminishing balance basis. You can borrow up to 2 months' salary (capped at ₱24,000) if you have 36 monthly contributions, or 1 month's salary if you have 6 contributions. Repayment is 24 months with fixed monthly deductions from your payroll or self-payment.

Pag-IBIG Housing Loans

Pag-IBIG Fund offers housing loans from ₱100,000 up to ₱6,500,000. Interest rates range from 3% for very low-cost housing to 6.375% for loans above ₱750,000, fixed for 1 year (with 3, 5, 10, 15, 20, 25, and 30-year options with different fixed periods). Pag-IBIG housing loans are consistently among the most affordable in the Philippines for qualified members.

Sample Loan Computations

1. 1Personal loan ₱100,000 at 1.5%/month for 24 months → Monthly payment: ₱4,993 → Total payment: ₱119,832 → Total interest: ₱19,832
2. 2Car loan ₱800,000 at 4.5% add-on per year for 60 months → Monthly payment: ₱16,333 → Total payment: ₱980,000 → Total interest: ₱180,000
3. 3Housing loan ₱3,000,000 at 7% per year for 20 years → Monthly payment: ₱23,259 → Total payment: ₱5,582,160 → Total interest: ₱2,582,160