The Bangko Sentral ng Pilipinas has increased the maximum repayment period for salary-based general-purpose consumption loans (SBGPCLs) from five years to seven years, providing borrowers with more manageable payment terms while promoting responsible borrowing.

The policy applies to all borrowers, including teachers and other employees, and covers unsecured loans typically used for education, healthcare, emergencies, travel, household needs, and other personal expenses. These loans are commonly repaid through salary deductions, pensions, or other stable sources of income.

Under the new guidelines, the seven-year period serves as the maximum allowable loan tenor rather than a fixed repayment term. Banks and other BSP-supervised financial institutions are still required to determine repayment periods based on a borrower’s capacity to pay, taking into account employment status, credit history, sources of repayment, and the purpose of the loan.

The BSP said the longer repayment period is intended to ease the financial burden on borrowers while maintaining safeguards against excessive debt.

The central bank also reiterated its commitment to promoting financial literacy and responsible borrowing through partnerships with the Department of Education and financial institutions. Borrowers may also explore refinancing options offered by institutions such as the Government Service Insurance System and the Social Security System.