Hi everyone, just wanted to get insights from those who have experience with bank financing.
I currently have a time deposit with a local bank and I’m considering using it as collateral to take out a loan (around ₱10M) instead of withdrawing the funds directly. The goal is to use the loan proceeds to purchase a property.
From what I understand, the TD will still earn interest, while I pay a slightly higher interest on the loan—so the net cost is just the spread.
My questions are:
Is this structure commonly allowed/practical in the Philippines?
Is it actually a smart move vs just using the TD directly?
What risks or downsides should I be aware of?
Would banks typically approve this setup for property acquisition?
Would appreciate any advice, especially from those who’ve done something similar or work in banking/finance.
Thanks!