It’s unavoidable at times.
Borrowing money can be your best and quickest response to a financial crisis, no matter how much you try to push it to the bottom of your list of possibilities. “I don’t want to be in debt to anyone, especially individuals I know,” you could be thinking. It’s humiliating.”
We’ve all been there, believe it or not. Yes, borrowing something, especially money, is never simple. That is a proven fact. The word “utang” carries a negative connotation. Our instinct tells us to stay away from it as much as possible.
But, in fact, it doesn’t have to be that way all of the time.
Borrowing money does not always imply that we are in a desperate situation. Just ask the millions of entrepreneurs who borrowed money to get their firm off the ground. Alternatively, the student who was able to complete her exam on time despite her parent’s remittance arriving a day late.
Borrowing money is a tool for these folks. It’s something you use to help you go forward in your current situation. “Who Wants to be a Millionaire?” is a television show in which contestants compete for a million dollars. Contestants have the option of using a “lifeline” to assist them in answering the question. I’d like to view borrowing and lending money in the same light.
It’s a practical solution to a challenging and time-sensitive challenge.
Traditional Bank Loans vs Online Lending Platforms
Filipinos’ readiness to experiment with digital and cashless payment methods demonstrates that we are gradually recognizing the advantages of modern technologies.
Take, for example, e-commerce. I’m willing to guess that you’ve already made a purchase on a major website like Lazada or Shopee. This current e-commerce surge is a clear indication that Pinoys are becoming more open to other methods of doing financial transactions.
In the lending area, the same is true. The growing popularity of online lending services demonstrates that there is a demand for such a service. If you try to borrow money from a bank, you won’t be able to say that it’s fast, convenient, or hassle-free.
The following section will outline the major benefits and drawbacks of both traditional and online lending platforms.
Traditional Banks
Pros
- You can take out greater loans.
- Independent authorities are in charge of regulation.
- Bank regulations are followed.
Cons
- You can take out greater loans.
- Independent authorities are in charge of regulation.
- Bank regulations are followed.
- Process of approval that is more severe
Online Lending Platforms
Pros
- Loans are approved more quickly.
- Application is simple and quick.
- There are less requirements
- Allows for the loan of small amounts for short periods of time.
Cons
- In comparison to banks, the maximum amount that can be loaned is lower.
- There is no independent regulatory authority in place to oversee activities.
- Borrowers run the danger of having their data compromised because the process is done online.
In the Philippines, there are various types of online loans.
Business Loans
A sort of loan designed exclusively for enterprises in need of money for start-up or expansion (growth).
Requirements that are common:
- IDs that are valid
- BIR stamp on the most recent ITR
- Bank statements from the most recent period
- Documents from the Department of Transportation (DTI) that are up to date and valid.
- A valid business license or a mayor’s permit is required.
- Documents from the Department of Transportation (DTI) that are up to date and valid.
Partnerships/corporations must also meet the following requirements:
- GIS and valid DTI/SEC registration documents
- Documents relating to a partnership or a board of directors
- Agreement on Continuing Suretyship
Quick Cash Loans
A fast cash loan is a type of loan that allows you to apply for money and have it sent directly into your bank account. Fast personal loans are one way to cover unexpected expenses and other short-term borrowing needs.
Requirements that are common:
- IDs that are valid (1 must be government-issued)
- Billing evidence
- A regular employee is required.
- Contact information, including phone numbers and email addresses, is required.
Loan for franchise
Individuals who want to start a franchise firm can get a special loan.
- IDs that are valid
- Certificate of Franchise
- Bank statements from the most recent period
- Documents from the Department of Transportation (DTI) that are up to date and valid.
- A valid business license or a mayor’s permit is required.
- Documents from the Department of Transportation (DTI) that are in good standing
Loans on Pawn
Collateral-based loans are those in which the borrower’s valuables are used to secure the loan (and will be given back when the loan is repaid).
Requirements that are common:
- Government-issued identification cards
- Collateral (valued assets such as jewelry, electronic devices, and so forth…)
Salary Loans
A loan that must be paid in whole or in installments when the borrower receives their next paycheck (the amount is often based on the borrower’s pay period gross earnings).
Requirements that are common:
- Filipino national
- IDs that are valid
- Pay Stubs from the most recent period
- A copy of your ITR
- Employment Certificate
- Meets the lender’s criterion for a minimum monthly basic pay.
- (Billing/residence proof)
Loans for OFWs
A loan specifically designed to meet the needs of Overseas Filipino Workers and their families. Some lenders provide it to OFWs who are set to travel on a work assignment abroad (not currently working yet).
Requirements that are common:
- Filipino national
- IDs that are valid
- Meets the lender’s criterion for a minimum monthly basic pay.
- Latest Deployment Contract
- a copy of your work visa
- Overseas Employment Certificate from the POEA
- Billing/proof of residency
Loans for Products
A personal loan taken out for the exclusive purpose of acquiring a specific item. Items such as gadgets, furniture, and appliances, for example.)
Requirements that are common:
- IDs that are valid (1 must be government-issued)
- Billing evidence
- A regular employee is required.
- Contact information, including phone numbers and email addresses, is required.
Philippines’ Best Online Loan Apps & Lending Platforms
Before we go into the list, it’s worth noting that the Securities and Exchange Commission (SEC) continues to monitor and prosecute illegal online lending sites that harass and breach their borrowers’ privacy.
One of the main reasons we created (and continue to maintain) this guide is to help you avoid problematic online lending platforms that violate the privacy and rights of their users. Grit has no affiliation with any of the online loan platforms listed here.
- Home Credit PH
- Cashalo
- Tonik’s Quick Loans
- Tala
- CashMart PH
- First Circle
- Lendr
- Blend.ph
- RFC Loan
Personal Loans in the Philippines There are a variety of personal loans available in the Philippines.
Because of the simplicity and availability of access to funding for a variety of financial reasons and commitments, personal loans account for the largest portion of the lending industry. It’s an open-ended loan with a specified term and associated fees for those who are financially wise.
Personal loans are divided into four categories:
- Secured Loan – A loan that is approved based on collateral. For example, the borrower’s time deposit account at the same bank. Because of the security component, the interest rate is generally lower than unsecured loans.
- The application and paperwork are also simplified because the bank already has your information from your existing account. Appropriate for consumers with no or limited credit history.
- No collateral is required for an unsecured loan. Banks and lenders are reliant on the information and credit history you provide.
Because of the increased risk, interest rates are slightly higher. To decide the terms that will be provided to the borrower, a thorough screening process is required.
- Overseas Filipino Workers (OFWs) can get a personal loan that is tailored to their needs. Both secured and unsecured packages are available.
- Top Up Loan – Does exactly what it says on the tin: it adds money to an existing loan. Borrowers have the option of borrowing extra money and adding it to their existing loans.
In the Philippines, here are some tips on how to get your online loan application accepted faster.
Do you know what kind of loan you’ll need?
The first stage is to figure out what you’ll do with the money. Determine the loan amount and whether you want a secured or unsecured loan.
Secured loans require you to put something up as collateral for the loan. Unsecured loans are less stringent in terms of standards, but the maximum amount you can borrow is typically lower.
When should you take out a business or personal loan?
On the surface, the solution appears to be self-evident. A business loan can be used to fund any type of business operation. Take out a personal loan for (nearly) anything else.
However, there are several fundamental questions you should ask yourself before taking out a large loan. Apart from completing your homework and thoroughly reading each bank’s terms and conditions, following these three basic guidelines for borrowing money will help you keep things in perspective.
- Requesting a loan for personal use, such as merchandise or travel expenses, is not a good idea.
- In most cases, personal loans are best used in times of need.
- Loans should be utilized to increase the value of your assets. For example, if you take out a loan to acquire a multicab truck to speed up your business deliveries, it will pay for itself over time as a result of the time savings. It also enables you to access and serve a larger number of potential customers, resulting in increased profits.
Disclaimer: Optimum Remit is not linked with any of the online lending platforms or financial institutions mentioned in this article. This guide’s main objective is to inform our readers about how online cash loans function and the finest options available to them.
