DepEd expands APDS loan repayment terms up to seven years under new order
DepEd expands APDS loan repayment terms up to seven years under new order
PASIG CITY — The Department of Education (DepEd) has officially issued DepEd Order No. 020, s. 2026, extending the maximum loan repayment terms for public school teachers and personnel under the Automatic Payroll Deduction System (APDS) Program from five (5) years to seven (7) years.
Signed by Education Secretary Sonny Angara on August 7, 2026, the policy adjustment aligns DepEd guidelines with the Bangko Sentral ng Pilipinas (BSP) Circular No. 1239, which covers amendments to regulations on salary-based general-purpose consumption loans.
Key Highlights of the New Policy
1. Extended Repayment Period
Under the revised guidelines, eligible public school teachers and DepEd personnel can now spread their loan repayments over a period of up to seven years, easing monthly financial pressures.
2. Updated Interest Rate Ceilings and Charges
APDS-accredited lending entities must adhere to the prescribed contractual interest rate ceilings based on a diminishing principal balance, alongside a one-time upfront other charge of 6.000%:
| Loan Term | Contractual Interest Rate | Effective Interest Rate (EIR, p.a.) |
|---|---|---|
| 1 Year | 7.500% p.a. (0.625% per month) | 21.091% |
| 2 Years | 9.000% p.a. (0.750% per month) | 16.351% |
| 3 Years | 9.660% p.a. (0.805% per month) | 14.886% |
| 4 Years | 9.660% p.a. (0.805% per month) | 13.759% |
| 5 Years | 9.660% p.a. (0.805% per month) | 13.082% |
| 6 Years | 9.660% p.a. (0.805% per month) | 12.632% |
| 7 Years | 9.660% p.a. (0.805% per month) | 12.310% |
Note: Accredited entities are strongly encouraged to offer loan products with rates lower than these prescribed ceilings.
3. Discretionary Approval and Credit Assessment
DepEd emphasized that qualifying for a seven-year term is not automatic. The approval of extended loan terms rests solely at the discretion of the APDS-accredited entity, which must conduct its own prudent credit assessment and adhere to internal risk management frameworks.
4. DepEd Non-Liability
The Department serves strictly as a payroll deduction facilitator. DepEd will not participate in, influence, or bear any pecuniary or legal liability arising from the credit evaluation, administration, enforcement, or repayment of loans handled by private lending institutions.
5. Mandatory Financial Literacy Programs
To protect employees from over-indebtedness, accredited entities are now required to provide comprehensive financial literacy or loan education prior to loan evaluation or release. This training must cover responsible borrowing, terms and conditions, default consequences, and basic financial management. Entities must maintain proper records of completion for DepEd monitoring.
Download Memorandum
You can download the complete official memorandum document package below:
Download DepEd Order No. 020, s. 2026 (PDF)Full Text of DepEd Order No. 020, s. 2026
Republic of the Philippines
Department of Education
Office of the SecretaryAUG 07 2026
DepEd ORDER No. 020, s. 2026REVISED LOAN TERMS OF PAYMENT UNDER THE DEPARTMENT OF EDUCATION'S AUTOMATIC PAYROLL DEDUCTION SYSTEM PROGRAM
To: Undersecretaries, Assistant Secretaries, Bureau and Service Directors, Regional Directors, Schools Division Superintendents, Public Elementary and Secondary School Heads, All Others Concerned
1. Pursuant to the Bangko Sentral ng Pilipinas Circular No. 1239 titled Amendments to Regulations on Salary-Based General-Purpose Consumption Loans, DepEd Order (DO) No. 004, s. 2022 titled Extension of Loan Terms of Payment under the Department's Automatic Payroll Deduction System Program (APDS), which amended Paragraph 26 of DO 020, s. 2021 (Enhanced Guidelines on Accreditation/Re-Accreditation of Private Entities Under the Automatic Payroll Deduction System Program) shall be further amended to extend the maximum loan terms from five to seven years, as follows:
26. Entities participating in the APDS for lending business shall conform with the ceilings on interest and non-interest rates on loans as shown below. Only loans with a term not exceeding seven years will be accommodated under APDS.
2. APDS-accredited entities are encouraged to offer loans with rates lower than the prescribed ceilings.
3. The grant of a loan repayment term of up to seven years under the APDS does not automatically qualify all borrowers for such repayment period.
4. The approval of such loan term shall be solely at the discretion of the APDS-accredited entity and shall be based on its own prudent credit assessment, taking into consideration its internal credit policies, risk management framework, applicable laws, rules, regulations, and regulatory issuances, as well as such other factors as the APDS-accredited entity may deem relevant in evaluating the borrower's capacity to repay.
5. The Department shall not participate in or influence the APDS-accredited entity's credit evaluation or loan approval process and shall solely facilitate payroll deductions in accordance with APDS policies. Accordingly, DepEd shall not incur any liability, pecuniary or otherwise, arising from or in connection with the approval, administration, enforcement, or repayment of loans granted by APDS-accredited entities.
6. APDS-accredited entities shall ensure that borrowers are provided with financial literacy or loan education prior to the evaluation or release of any loan under the APDS through appropriate means, whether through physical or digital platforms. At a minimum, such financial literacy or loan education shall cover responsible borrowing, loan terms and conditions, applicable interest and other charges, repayment obligations, the consequences of non-payment or default, and basic financial management principles. The APDS-accredited entities shall maintain documentary or electronic records evidencing the borrower's completion of, or acknowledgment of receipt of, the financial literacy or loan education, which shall be made available to the Department upon request for monitoring purposes.
7. For ready reference and guidance of all concerned, the copies of the Illustrations under Annexes D-1 to D-7, as amended, are shown in the enclosure hereof.
8. All other provisions of DO 020, s. 2021 and DO 004, s. 2022, and all other issuances, or parts thereof, inconsistent with this Order are repealed, amended, or modified accordingly.
9. This Order shall take effect immediately upon its approval and issuance, and upon its publication on the DepEd website, the Official Gazette, or a newspaper of general circulation. Certified copies of this Order shall be registered with the Office of the National Administrative Register (ONAR) at the University of the Philippines Law Center (UP LC), UP Diliman, Quezon City.
10. This Order shall remain in effect throughout its implementation period and shall continue in full force until amended, modified, repealed, or superseded by a subsequent issuance.
11. For more information, please contact the Employee Account Management Division, the APDS Secretariat, Department of Education Central Office, DepEd Complex, Meralco Avenue, Pasig City through email at fs.eamd@deped.gov.ph.
12. Immediate dissemination of and strict compliance with this Order is directed.
SONNY ANGARA
Secretary
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