Cash Installment, Credit Card, Or Personal Loan: What’s The Best Payment Method For Your Child’s Tuition?
2 min readTuition is one of the most anticipated bulk expenses in most households. Filipino parents, in particular, believe that a strong educational background is tantamount to success later on in their child’s life.
We pour our hearts and souls to provide quality education for our kids, and as much as possible, we want to send them to the best schools we can afford.
This rings especially true since the K- 12 curriculum has been implemented in 2012, where you get two more years on top of the traditional six-year grade school and four-year high school.
Thankfully, though, there are facilities that can help you finance your child’s education other than the annual, semi-annual, semestral, quarterly, and bi-monthly, and monthly terms schools offer.
Cash is king, but when it comes to paying in installment, is it wiser to opt for a monthly payment, use your credit card, or take out a loan? We pulled up a sample tuition fee breakdown from an exclusive school in Quezon City for comparison.
Standard school payment terms
Total payable amount: P84,073.24
| Cash | Semestral | Quarterly | Bi-Monthly | Monthly |
| P84, 073.24 | P56,535.59 | P41,954.27 | P39,113 | P17,741.77 |
| Full Payment | P29,537.65 | P14,956.33 | P12,115.06 | P8,036.83 |
| Total: P86,073.24 | P14,956.33 | P12,115.06 | P8,036.83 | |
| You pay P2,000 more | P14, 953.33 | P12,115.06 | P8,036.83 | |
| Total: P86,823.26 | P12,115.06 | P8,036.83 | ||
| You pay P2,750.03 more | Total: P87,573.24 | P8,036.83 | ||
| You pay P3,500 more | P8,036.83 | |||
| P8,036.83 | ||||
| P8,036.83 | ||||
| P8,036.83 | ||||
| Total: P90,073.24 | ||||
| You pay P6,000 more |
Credit card for tuition fee payment
Using the convenience of swiping your credit card to enroll your child, you can choose to pay from a minimum of three months up to 24 months. Note, however, that not all schools accept credit cards.
To compute for the exact amount, you can use the formula below:
Monthly Installment Computation formula
= Installment Transaction Amount x [1+(Monthly Converted Rate x Term)] / Term
Total payable amount: P 84,073.24
| Terms | Monthly Factor Rate | Monthly installment | Total amount to Pay | Interest amount |
| 3 months | 1.00% | P28,865.15 | P86,595.45 | P2,522.21 |
| 6 months | 1.00% | P14,852.94 | P89,117.64 | P5,044.4 |
| 12 months | 0.75% | P7,636.65 | P91,639.80 | P7,566.54 |
| 18 months | 0.75% | P5,301.28 | P95,423.04 | P11,349.8 |
| 24 months | 0.75% | P4,133.60 | P99,192 | P15,118.76 |
Personal loan for tuition fee payment
With a personal loan, you get more flexible payment terms. You can borrow up to P2 million and spread out your payment from a minimum of 12 months to a maximum of 60 months installment.
Also, it is convenient for overall budget allocation, especially for big families, as you have the option to shell out a smaller amount monthly. See the computations below.
Total payable amount: P84,073.24
| Tenor | Monthly installment (for a loan amount of P50,000) | Monthly installment (for a loan amount of P100,000) |
| 12 | P4,789.43 | P9,596.86 |
| 24 | P2,716.48 | P5,432.95 |
| 36 | P2,038.58 | P4,077.16 |
| 48 | P1,711.28 | P3,422.56 |
About the author
eCompareMo eCompareMo is the No. 1 financial e-commerce site in the Philippines. Follow us on Twitter and Instagram: @ecomparemo.