Loan apps are everywhere in the Philippines, and so are illegal ones that harvest your contacts and shame you to collect. The good news: the SEC has tight rules and a public way to check a lender before you borrow. Here is how to stay safe.
Only use SEC-registered lenders
Every lending or financing company must hold an SEC Certificate of Authority, and since November 2021 the SEC has had a moratorium on registering new online lending platforms - so legitimate apps are pre-existing, licensed players. Verify any lender in the SEC Check App or the SEC portal before you transact, and file complaints through the SEC at imessage.sec.gov.ph.
Your data is protected
Under a joint advisory of the SEC, the National Privacy Commission and the DICT, apps are barred from demanding access to your phone contacts, photo gallery or social media. Only a declared guarantor who signed a separate written consent may be contacted about a default - never your wider contact list. An app that wants your contacts is a red flag.
Know the interest caps
For small short-term loans (principal of PHP 10,000 or less and a term of 4 months or less), the BSP and SEC cap the nominal interest at 6% per month and the effective rate (including fees) at 15% per month. Crucially, the total cost - all interest, fees and penalties combined - can never exceed 100% of the amount you borrowed. Borrow PHP 5,000 and you can never legally owe more than PHP 10,000.
Verify with the SEC
Use the SEC Check App or portal to confirm a lender holds a Certificate of Authority before you borrow. Because new online lending platforms are under a moratorium, any brand-new app claiming to be a fresh lender is suspect.
Report harassment
Collectors cannot threaten you, call before 6am or after 10pm, contact your friends and family, or pretend you will be arrested (there is no jail for ordinary debt). If they do, report to the SEC. Before borrowing, compare the licensed apps in our loan apps guide and see personal loans and banks.
Tip: never share documents with an app you cannot find on the SEC list.