5 Scenarios When Taking Out a Bank Loan Makes Good Financial Sense

Not every Filipino has the means to address pressing financial needs, whether that be unexpected expenses such as medical emergencies or significant life milestones such as starting a business to improve one’s economic situation. In such cases, bank loans can be a powerful financial tool to obtain the necessary funding to meet emergency expenses or achieve personal and business goals.

Here at EastWest Bank, we understand how important having a financial lifeline can be for many Filipinos. Thus, we offer flexible loan options that are tailored to our clients’ needs. Before you apply for a loan, however, it’s crucial to understand when and why a loan is needed first. This information is key to helping you—and us—find the best loan option to suit your needs and financial means. 

Below are several scenarios where taking out a bank loan is a financially prudent move, enabling you to better judge whether borrowing from a bank is the ideal choice for your specific situation.

1. Starting or Expanding a Business

According to a 2023 survey conducted by analytics firm OCTA Research, four out of five Filipinos dream of becoming entrepreneurs. With benefits such as being your own boss and increased profit potential, it then comes as no surprise that many Filipinos would want to try their hand at running a business. However, in the same survey, 72% of respondents cited that they need further support to gain capital to do so.

If you’re in the same situation of wanting to start a business yet lacking the capital, then bank loans can provide you with the funds needed to kickstart your entrepreneurial journey. EastWest Bank’s Personal Loan product, for instance, can offer a loanable amount ranging from PHP 25,000 to PHP 3 million, depending on your capital needs. Moreover, our personal loans have flexible terms that allow you up to 60 months of repayment, allowing you to focus better on getting your new business off the ground first by choosing a repayment plan that works best for you.

2. Purchasing a Home

Given today’s rising real estate prices, owning a home has become an unattainable goal for many. With the support of a bank loan, however, it’s possible to spread the cost of a home over many years, allowing you to become a homeowner without having to drain your savings. This way, you still have enough budget to furnish your home to make it functional and comfortable for your family.

EastWest Bank offers a Home Loan program for those in need of funds to purchase or build a home. You can opt for flexible repayment terms of up to 30 years as well as choose your own fixed term rates to protect yourself from fluctuating rates over the years. If you’re still weighing your options, try out our home loan calculator and calculate for a monthly amortization that suits your budget.

3. Funding Education

Education is a long-term investment, yet one that can be costly to make as the high tuition fees and school expenses these days can easily drain savings. In particular, college education in the Philippines can cost hundreds of thousands of pesos, depending on the student’s choice of course and university. 

Taking out a bank loan can help you support your child or a family member to continue their schooling without putting a strain on your household budget. It also gives you peace of mind knowing that they won’t be delayed in taking examinations or receiving school documents due to unpaid fees.

4. Emergency Medical Expenses

Sudden medical expenses can be financially draining, especially if you don’t have any health insurance to shoulder the bills. A personal loan can provide you with quick access to funds needed to cover medical emergencies, ensuring that treatment for you or a loved one won't be delayed. 

Moreover, with the loan amount covering the emergency, you won’t have to allocate a budget that’s already planned for other financial obligations. This means less worries about other bills going unpaid because you used up the money for hospital bills. Thus, you can simply focus on getting better or supporting your loved one until they recover.

5. Buying a Vehicle

A vehicle can be a worthwhile purchase, either to provide you with comfort and convenience during daily travels or to open up additional means for income by offering ridesharing services. To spread out the costs of a vehicle, you can apply for EastWest Bank’s Auto Loan for up to 80% of the vehicle’s selling price. This allows you to own a vehicle without the exorbitant upfront cost. Instead, you can choose from a minimum of 12 months up to a maximum of 60 months for your repayment term, depending on your financial means.

Our auto loan is available for both brand-new and second-hand vehicles, giving you more flexibility when choosing which unit you want to purchase with your loan money. To get a better idea of possible monthly amortizations, you can use our auto loan calculator and input the price of your dream car as well as your preferred term length.

When used in opportune situations, bank loans can prove to be a powerful tool for achieving your financial goals and navigating life's challenges. If any of the situations above are relevant to you, then taking out a bank loan may just be the next financial step you need to take to meet your goals while still maintaining financial stability.