Loan Dictionary

Navigating through the financial world can be a confusing ride sometimes, especially with all the jargon you hear. When it comes to applying for a loan, there are important terms to remember. 

1. Credit Score

A credit score is a number that reflects your capability to manage debt. Lending institutions factor in your credit payment history, the amount you've loaned, the type and length of your credit, and any new credit that you've acquired. A higher credit score gives you more chances of being approved for a loan, so it’s important to practice responsible payment habits. 

2. Interest rate

When you acquire credit, you will need to repay the lender more than the amount you borrowed. The interest rate is the amount that is charged on top of the amount you borrow by the lending institution. This is also to compensate for the bank’s risk of lending money. The rate varies depending on the bank and the terms of the loan.  

3. Collateral

There are risks when lending institutions give credit, such as borrowers being unable to repay on time. Collateral serves as security for the lenders in such cases. This can come in the different forms of assets that borrowers own, such as real estate. However, not all lenders require collateral from borrowers.  

4. Secured Loan

When applying for a loan, the bank or lending institution may require a collateral, which may come in the form of a car, house, or savings accounts. A loan that requires this is called a secured loan. Having collateral also incentivizes borrowers to repay their credit on time to avoid giving up their assets. 

5. Unsecured Loan

There are other banks that do not require any collateral when acquiring a loan, but rely instead on a borrower’s creditworthiness or credit score. This is called an unsecured loan and is commonly used to fund education, home improvements, and even weddings.  

6. Loan Tenure

The loan tenure refers to the length of time that the borrower needs to repay the loan, including the interest. Depending on the type of loan acquired, this could range from months to years. 


Acquiring credit can certainly help you achieve your life’s goals and put you on the track to financial freedom. You can use it to pursue further education, start a business, fund home improvements, and more! 

Applying for a loan is easy with CIMB Bank! 

At CIMB Bank Philippines, you can loan as much as PHP 1 million with ZERO PROCESSING FEE and NO EARLY SETTLEMENT FEE. Apply in as fast as 10 minutes. 


Get rewarded for responsible payment habits! You can also get interest rebates up to 30% on your Personal Loan when you pay your monthly dues on time. Take a step towards your goals!

Download the app to apply for our Personal Loan today!

CIMB Bank Philippines Inc. is regulated by the Bangko Sentral ng Pilipinas. You may contact the BSP Financial Consumer Protection Department at (+632)8708-7087 or