MANILA – In the midst of expectations that interest rates will remain unchanged, now is an opportune time to secure a loan for major expenses such as homes, cars, or business expansions, as suggested by Metropolitan Bank and Trust Co. (Metrobank).
The Bangko Sentral ng Pilipinas (BSP) benchmark rate is anticipated to stay at 6.25 percent for the second consecutive month, according to the Monetary Board’s policy stance decision on June 22.
READ: BSP to Maintain Key Policy Rate at 6.25%
However, Metrobank cautions borrowers to assess their “financial health,” as a pause in rate hikes neither increases nor reduces the cost of borrowing money.
Lenders use the debt burden ratio (DBR) to determine a borrower’s repayment capacity. The DBR is calculated by dividing the total monthly loan payments by the monthly income. A high DBR, expressed as a percentage, indicates a low ability to pay for additional loans.
“As a guideline, your total loan payments should range from 30 percent to 35 percent of your monthly income,” advises Metrobank. “By staying within this range, you will have enough leeway to cover essential expenses while also saving or even investing.” INQ
READ: Following a pause in rate hikes, BSP to mimic US Fed
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Omprakash Tiwary is a business writer who delves into the intricacies of the corporate world. With a focus on finance and economic landscape. He offers readers valuable insights into market trends, entrepreneurship, and economic developments.
Denial of responsibility! Samachar Central is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.