Excessive / Undisclosed APR (Online Lending)
Effective annual percentage rate — including processing fees, insurance, and other charges — far exceeds what was advertised or the BSP Circular 1133 cap.
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Documented Cases
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Escalated / Verified
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With Amount Disputed
Legal Basis in the Philippines
- • RA 3765 (Truth in Lending Act) — lender must disclose the true APR including all fees before loan signing
- • BSP Circular 1133 (2021) — caps effective interest rate on consumer loans and credit cards at 24% per annum (2% per month)
- • SEC Memorandum Circular 3 (2022) — online lending platforms must display effective interest rate prominently in the app
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Relevant guides
All guides →Step-by-step, with the exact BSP intake channels
How to file a BSP consumer complaint — online and on paper
Step-by-step guide to filing a complaint with the Bangko Sentral ng Pilipinas — BSP Online Buddy, consumer email, and the paper Consumer Assistance Mechanism form.
Step-by-step, citing SEC MC 18 (2019) and the FinCare e-portal
How to file a SEC complaint against an online lending app
Step-by-step guide to filing a Securities and Exchange Commission complaint against a Philippine online lending app — SEC MC 18 (2019), evidence checklist, and the FinCare portal.
RA 10173, NPC Circular 16-01, and the privacy.gov.ph filing form
How to document a data-privacy violation for an NPC complaint
How to document a Philippine data privacy violation for an NPC complaint — RA 10173, NPC Circular 16-01, evidence pack, screenshots, and the filing path.
Frequently asked — Excessive / Undisclosed APR (Online Lending)
What is the maximum legal interest rate for online loans in the Philippines?
BSP Circular 1133 (2021), extended by Circular 1165 (2023), caps consumer-loan effective interest at 6% per month nominal (24% per annum) and total cost at 15% per month for short-term, low-value loans. Courts may strike rates beyond this as unconscionable under Civil Code Art. 1306 (Medel v. CA).
- Source:BSP Circular 1133 (2021)
- Source:BSP Circular 1165 (2023)
- Source:Medel v. CA, G.R. 131622 (1998)
Are online lending apps required to disclose APR?
Yes. RA 3765 (Truth in Lending Act) requires written disclosure of the effective APR before loan signing; SEC MC 3 (2022) further requires online lending platforms to display the effective interest rate prominently in the app.
How do I prove the APR exceeded the cap?
Compute (interest + processing fees + insurance + service charges) ÷ principal × 12. Save the loan disclosure (required under RA 3765) and the in-app fee breakdown screenshots; file with SEC EIPD if the lender is SEC-registered.
- Source:RA 3765 — Truth in Lending Act
- Source:SEC EIPD
Pwede bang ibalik ang sobrang singil ng online lender?
Oo. Sa ilalim ng RA 11765 §4(g) at BSP Circular 1160, ang anumang sobrang singil sa disclosed na rate ay dapat irefund sa loob ng 15 business days. Ang BSP Circular 1133 cap ang ginagawang basehan ng 'sobrang singil'.
- Source:RA 11765 (FCPA, 2022)
- Source:BSP Circular 1160 — IRR of RA 11765
- Source:BSP Circular 1133 (2021)
Can I sue for predatory interest?
Yes. Civil Code Art. 1306 lets courts strike unconscionable rates; Medel v. CA (1998) and subsequent cases have voided 5%–10% per-month rates. Small claims (≤ ₱1,000,000) is available without a lawyer per A.M. No. 08-8-7-SC.