Snapshot. If you borrow from a non-bank lender—like a financing company, lending company, dealer-arranged auto/appliance financing, or a regulated online lending app—your rights are protected by a stack of Philippine laws and rules, chiefly the Financial Consumer Protection Act (FCPA), the Truth in Lending Act (TILA), the Financing Company Act/Lending Company Regulation Act, the Consumer Act, and the Data Privacy Act. These guarantee clear pricing and disclosures, fair collection, privacy, redress and refunds, and due process for repossession/foreclosure. This guide explains those rights, how they work in real life, and what to do when lenders or collectors step out of line.

1) Who regulates what (non-bank space)

Securities and Exchange Commission (SEC) – supervises financing companies and lending companies (including many online lending apps). Requires registration, Certificate of Authority, governance, disclosure, and fair collection standards.
Bangko Sentral ng Pilipinas (BSP) – supervises banks and some non-bank financial institutions if they are BSP-regulated; most private financing/lending companies are SEC-regulated, not BSP-regulated.
National Privacy Commission (NPC) – enforces the Data Privacy Act for any entity processing your personal data.
DTI – enforces the Consumer Act (truth-in-advertising/deceptive sales) for generic consumer protection issues.
Courts/Prosecutors – handle civil/criminal cases (e.g., unfair collection that crosses into libel/coercion, or contract disputes).

Practical check: Before you sign, ask for the lender’s SEC Registration Number and Certificate of Authority to Operate as a Financing/Lending Company. If they can’t show these, walk away.

2) Your core rights before you borrow

A) Right to clear, complete, and prior disclosure (Truth in Lending)

You must be told before you are bound:

Total amount financed and net proceeds you will actually receive (after any fees).
Finance charge (all costs of credit, not just “interest”).
Effective interest rate/Annual Percentage Rate (APR) and payment schedule (installments, due dates).
All fees and penalties (processing, documentary stamp tax pass-through, collection/late charges, prepayment/termination fees, repossession/impound fees where applicable).
Whether collateral is required (e.g., chattel mortgage on a vehicle/appliance), and the exact consequences of default.

You are entitled to a written Disclosure Statement (separate from the promissory note) and a copy of every document you sign.

B) Right to fair advertising & sales

Marketing must not hide mandatory fees or misrepresent “0%” offers that actually roll fees into price. “Low daily rate” quotes must not conceal higher APR.

C) Right to choose and to say no

No one can force you to buy add-ons (e.g., credit life insurance, accessories) as a condition for approval unless clearly optional or required by law or risk policy with proper justification and disclosure. You may walk away until you sign.

3) Your rights during the loan

A) Accurate statements & receipts

You may demand:

Amortization schedule, running balance, and official receipts for all payments.
Itemized charges when any fee/penalty is imposed.
A payoff figure (full settlement amount) valid for a stated date.

B) Privacy & data minimization (Data Privacy Act)

Lenders/collectors must:

Collect/use only necessary data for credit evaluation/servicing.
Secure your data; not leak borrower lists.
Not spam or shame your contacts/employer; third-party disclosure of your debt needs lawful basis and must be necessary and proportionate.
Honor your data subject rights (access, rectification, objection, erasure where applicable).

C) Fair collection (FCPA + SEC conduct rules)

Prohibited practices include:

Debt shaming on social media or texts to contacts;
Threats of arrest for mere non-payment (there is no imprisonment for simple debt);
Profanity, harassment, or late-night calls intended to annoy;
Fake subpoenas/warrants;
Unlawful contact scraping from your phone and using it to harass your network.

Permitted: Reasonable reminders to you via stated channels/hours; truthful legal info; offers to restructure.

D) Prepayment & pre-termination

You may prepay in whole or part. Lenders may charge a prepayment fee only if it is clearly stipulated, reasonable, and disclosed upfront. Upon full payment, you are entitled to a release of mortgage, cancellation of any post-dated checks, and the return of original documents.

4) Collateral, repossession, and deficiency balance—know the lines

Most vehicle/appliance financings use a chattel mortgage (CM) over the purchased item.

A) Your default & repossession due process

Demand first. Lenders should notify you of default and give a chance to cure.
Peaceful repossession only. No force, intimidation, or deception. If you refuse, lenders should go to court (replevin), not take the law into their own hands.
Inventory & acknowledgment. If you surrender, insist on a turnover receipt listing the item’s condition and accessories.

B) Foreclosure & sale

After valid repossession, the lender may foreclose and sell the item (usually at public auction under the CM). You have the right to notice and to redeem before sale if the contract/law so allows.

C) Can the lender still collect a deficiency?

It depends on the kind of transaction:

Sale on installments with chattel mortgage (classic dealer financing of personal property): Under the Recto Law (Civil Code Art. 1484), if the creditor chooses foreclosure, it cannot recover any deficiency from you. Choice of remedies: rescission/cancellation or foreclosure (no deficiency).
Straight loan with chattel mortgage (cash loan secured by your existing property): After foreclosure/sale, the lender may generally recover a deficiency if the CM and sale complied with law and the contract allows it.

Practical tip: Many auto “financing” deals are installment sales assigned to a financing company—Recto Law still applies, blocking deficiency after foreclosure. Read your documents: if the lender stands in the seller’s shoes on an installment sale with CM, no deficiency after foreclosure.

5) Fees, interest, and penalties—what’s lawful

The old Usury Law ceilings are not currently enforced; however, disclosure is mandatory and regulators may set product-specific caps (e.g., for small/short-term loans).
Penalty charges must be reasonable, disclosed, and not compounded in a way that becomes unconscionable.
“All-in” interest tactics that bury fees violate TILA; the finance charge must include all credit costs.
You may challenge unconscionable rates/fees under the Civil Code and FCPA (abusive conduct).

6) Your rights when things go wrong (redress ladder)

Step 1 — Write the lender (Internal Dispute Resolution)

Send a written complaint to the lender’s Consumer Protection/Compliance unit (email + hard copy). Ask for a ticket/reference number.
Lenders must acknowledge and resolve within a reasonable period (policies often use 7–15 banking days depending on complexity).

Step 2 — Regulator complaint

SEC: abusive collection, illegal fees, unlicensed lending, unfair contract terms, online lending app abuses.
NPC: privacy violations (contact scraping, third-party shaming, data leaks).
DTI: deceptive advertisements/sales practices.
Attach screenshots, contracts, ORs, call logs, and your ID.

Step 3 — Civil/criminal routes

Civil: rescission/reformation of contract, sum of money, damages (moral/exemplary/attorney’s fees), injunction (to stop harassment), declaratory relief on Recto Law no-deficiency.
Criminal (when applicable): grave coercion/threats, libel/cyber libel, falsification (fake court papers), Data Privacy crimes.

Step 4 — Small Claims Court

Fast track for money claims within the current small claims threshold; lawyers not required at hearing. Useful for illegal fees or refunds.

7) Special issues with online lending apps (OLAs)

Must be SEC-licensed. Unlicensed apps are illegal.
Contact scraping without necessity/consent and debt shaming texts to your phonebook are privacy violations and abusive collection.
Short-term rollover traps (re-loan to pay old loan) should be clearly disclosed with total cost; watch for stacked processing fees deducted upfront—this inflates the effective rate.

8) Borrower responsibilities (to keep your protections strong)

Give truthful information; misrepresentation can void protections and trigger fraud remedies.
Read the disclosure statement and loan contract; ask for unclear items to be written in.
Pay on time or renegotiate early; keep proof of payments.
Insure collateral if required; notify insurer/lender of claims or loss.
Update contacts/address so notices reach you (affects due process on collections/repossession).

9) Practical playbooks & templates

A) Request for Disclosure/Amortization & Receipts

Subject: Request for Disclosure Statement / Amortization Schedule / Receipts

Dear [Lender]:

Please provide within five (5) banking days:
1) The Truth-in-Lending Disclosure Statement for Loan No. [___];
2) Current amortization schedule and outstanding balance as of [date];
3) Copies of official receipts for payments on [dates].

Thank you.
[Name | Account No. | Contact]

B) Dispute of Charges / Illegal Fees

Subject: Billing Dispute – Illegal/Undisclosed Charges

Dear [Lender]:

I dispute the following charges posted on [date]: [list].
These were not disclosed in the Disclosure Statement/contract and appear unlawful.
Please reverse them and issue a corrected statement within seven (7) banking days.

Regards,
[Name | Account No.]

C) Cease & Desist from Harassment / Privacy Breach

Subject: CEASE & DESIST – Unlawful Collection & Privacy Violations

Your agents have [called at unreasonable hours / disclosed my debt to third parties / posted online].
Cease these acts immediately. Limit contact to [number/email], Mon–Fri, 9am–6pm.
Delete any scraped contacts and confirm compliance within five (5) days.
Non-compliance will be reported to the SEC and NPC.

[Name | Account No.]

D) Payoff & Pre-termination Request

Subject: Payoff Quote and Pre-termination

Please provide a payoff amount valid through [date], showing principal, accrued interest,
and any stipulated and reasonable prepayment fee. Upon payment, release the chattel mortgage
and return all original documents within three (3) banking days.

[Name | Account No.]

10) Quick checklists

Before signing

Lender’s SEC registration & Certificate of Authority
Disclosure Statement with finance charge/APR & fees
Amortization schedule & total cost of credit
Collateral terms (CM), default consequences, repossession process
Optional add-ons clearly marked optional

While paying

Official receipts kept and filed
Running balance and payoff available on request
Privacy respected; no third-party shaming
Collection calls within reasonable hours & tone

If in trouble

Written complaint to lender (ticket no.)
Evidence pack: screenshots, call logs, contracts, ORs
File with SEC (conduct/licensing) and NPC (privacy) as needed
Consider Small Claims or civil action; invoke Recto Law where applicable

11) FAQs

Is there a “cooling-off” period to cancel a loan? There’s no general statutory cooling-off for consumer loans; it depends on your contract and the lender’s policy. You can still prepay (with any agreed reasonable fee).

Can they seize my car at night without notice? They should demand first and repossess only peacefully (no force/intimidation). If you object, they must go to court. Always ask for an inventory/turnover receipt.

They foreclosed my installment-sale car and now want a deficiency—legal? If it’s an installment sale with CM and the creditor chose foreclosure, Recto Law generally bars deficiency claims. If it’s a straight loan secured by CM, a deficiency may be claimable if procedures were lawful.

Are sky-high interest rates automatically illegal? Not automatically, but hidden fees and unconscionable charges can be struck down. You always have the right to full disclosure and to challenge abusive pricing/collection.

An online lender texted my contacts. What can I do? That’s likely a privacy and fair-collection violation. Preserve evidence and complain to NPC (privacy) and SEC (conduct), and send a cease-and-desist.

12) Key takeaways

You have the right to full price disclosure, fair treatment, privacy, and redress.
SEC licensing is non-negotiable—avoid unlicensed lenders.
For installment sales with chattel mortgage, foreclosure usually bars deficiency (Recto Law).
Harassment and debt shaming are unlawful—document and report them.
Use the IDR → SEC/NPC → courts ladder to resolve disputes quickly and effectively.

If you tell me the type of loan (auto/appliance/cash/OLA), your documents, and what went wrong (fees, harassment, repossession), I can map your best remedy path, draft a targeted letter, and outline which regulator to approach first.