Reduction of Nominal and Effective Interest Rates on Loan to Offered by Accredited Private Lending Institutions Under APDS

In view of the downward trend of Treasury Bill Rates, and after a careful evaluation by the Automatic Payroll Deduction System (APDS) Task Force on the issues raised by numerous accredited Private Lending Institutions (PLIs) under the Department of Education (DepEd) APDS, the imposition of the newly adjusted ceiling for interest and non-interest rates as well as the manner of its computation on loans to be offered to DepEd teaching and non-teaching personnel shall be as follows:

Particulars	Ceiling Rates/Manner of Computation
	From	To
Nominal Interest Rates per Annum
One (1) year	10.97% added on loan	7.50% added on the principal amount of loan
Two (2) years	12% added on loan	9.00% added on loan +
One-time Other Charges	6.00% deducted upfront form the principal amount of loan	6.00% deducted upfront
Effective Interest Rates per annum	29.93% to 24.00%	19.31% to 19.49%
Grace period on first loan amortization	Two (2) months	Two (2) months
Rebate/Discount	Based on the agreement between the parties	Only the principal loan balance shall be paid by the DepEd borrower, in case of advance payment of loan in full

The adjusted rates shall be made effective on loans to be incurred from July 1, 2011 onwards until further notice.

DepEd advised that conformity with these rates and manner of computation is a required condition for every PLI's eligibility to participate in the DepEd APDS Program.
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