THE Bangko Sentral ng Pilipinas (BSP) has extended the maximum repayment period for salary-based consumption loans to seven years, covering government employees, teachers, and other eligible borrowers.
The policy applies to salary-based general-purpose consumption loans (SBGPCLs), which are unsecured loans typically used for short-term and immediate needs such as education, healthcare, emergencies, travel, and household expenses, and are repaid through salary, pension, or other stable income streams.
BSP said the extended tenor is intended to make loan amortizations more manageable while reinforcing responsible borrowing and lending practices.
Previously, SBGPCLs were generally capped at three years, extendable to five years only in special cases.
Under the new circular, the seven-year term is the maximum allowable repayment period, not a fixed requirement. Banks and BSP-supervised financial institutions will still assess loan terms based on a borrower’s repayment capacity, income stability, credit history, and loan purpose.
The BSP emphasized that the longer tenor also serves as a safeguard against excessive borrowing while supporting financial stability.
For longer-term financing needs such as housing, motor vehicles, and credit card obligations, borrowers are advised to use other loan products that fall outside the scope of SBGPCLs and are not subject to the seven-year cap.
The central bank said it continues to work with the Department of Education and partner financial institutions to strengthen financial literacy programs and ensure borrowers maintain sufficient take-home pay after deductions.
Borrowers may also explore refinancing options through institutions such as the Government Service Insurance System (GSIS) and the Social Security System (SSS), BSP added.