Personal loans are a type of installment loans, which you can spend for any purpose. That means you borrow a fixed amount of money that you’ll pay back with interest. Online loan providers offer short-term loans where the maximum period forrepayment is one month. This type of loan is provided to people to help them use the money for purchasing something, paying bills, or paying another loan or debts.
Personal loans are either secured where you are required to offer collateral in exchange and if you fail to make payments the lender can take your collateral, or unsecured, where there’s no need for collateral.
Especially during the pandemic, there are a lot of loan companies offering online loans.
Online loans have become very popular for those in need of quick loans without a many requirements. Not only you’ll be approved in a few minutes, but they also offer loans without interest. Well, of course, these companies need revenues as well, so they have service charges or processing fees. There are a lot of disbursement methods as well, which is very convenient for the borrower. All transactions are done online.
Many Filipinos who don’t have a job usually borrow money from their friends or relatives. Since online loans have been introduced to the public, many people may get a loan here instead of asking a favor from a friend.
Not only can you get some money easily, but you also won’t see the face of the person that lends you money. Since borrowing money is embarrassing, this way there’s no need to explain why you need money, and this means less judgment from your relative whom you owe money. You won’t be the topic of the whole village because you borrow money. There’s peace of mind. Your responsibility will be to pay on time for good records. Online loans saved many people from these circumstances and bad experiences.
Most loan companies have an application you can download in Google Play Store, oryou can just simply sign up using the web. There’s an application form that needs filling out, where you provide your personal details, so that your identity may be verified. You also need to input the amount that you want to borrow (this will be subject to approval, though).
After that, you will be required to upload a copy of a government issued ID and proof of address (utility bill for electricity/water/internet) that you provided in the form. During this process, you as a loan applicant will need to submit a photo of the id and a selfie holding the ID. Some companies will also call the mobile number that you provided in the online form, so as to check that it is still active and working. A co-borrower is needed as well for the security of the loan provider just in case the main borrower fails to pay the loan on time.
Once you submit all the required information, it will be processed and you will receive a notification whether it was approved or rejected. If approved, there’s another process where you need to verify your disbursement method, either bank, online wallets, convenience stores, or money transfer institutions. If rejected, some companies require a certain period to lapse before you will be qualified to apply again, but some won’t allow any repeat application afterwards.
After successful verification, you will receive the amount you applied for. Some companies charge about 40% interest per month. You will receive an agreement for the loan on your email or through the app. The payment method, due date, and amount owed will be shown in the agreement and the application. You will also get a message to your phone as a reminder for the loan repayment. An instruction for repayment is available within the app; in case it does not, you can always ask their online customer support. All information is there, so there’s no way you will forget to pay.
Before the due date, you will receive a notification about the repayment reminder. Ifyou fail to pay, you must pay the interest, and your loan will then have another term. If the company is unable to reach out to you, the co-borrowing person whose details you provided will be contacted to ask about repaying the loan (which you don’t want to happen).
It would be better to pay on time for the chance of another loan with a higher amount, which you can receive in just few minutes after paying the initial loan. The more loans you get and pay, the more will be the amount for pre-approved loans. The maximum amount loan companies give amounts to PHP10,000.
Please note: If it is your first time applying for a loan, some companies may offer a zero-interest loan, but the initial loan amount ranges from PPH1,000 to PHP3,000 only. For the next loan, the interest rates will apply.
You can get an installment loan online, from a private institution, a bank, or a cooperative.
Private institutions offer personal loans like salary loans, where you must provide your payroll card. This type of loan has fewer interest rates and a longer period for repayment. Interest rates range from 4% to 10% of the original loan.
Payment terms range from 6 months up to 12 months. It is a secured loan, because they have collateral, which is your payroll card. There are a lot of requirements, too,as apart from your card, you must provide a bank statement, proof of billing, photo ID, co-borrower’s details, and some will also need clearance from your barangay office.
Bank loans do have many advantages, but they are very hard to get due to high requirements and strict rules. As such, you must have an account with a bank that has savings, and your credit score must be high.
Most people that apply for loans at a bank are those who have a private business, run a company, or need to get a new car.
Cooperatives are duly registered associations of persons with a common bond of interest. Only members can apply for a loan. A credit cooperative is an institution that promotes thrift and savings among its members and creates funds to grant loans for productivity.
As outlined above, you have got an option to apply for a loan online, from the comfort of your home. This is a great way to save your time, as you just fill out an application form on a website and then just sit back and wait for a decision.
In case you get approved, you will receive the amount you need from a private online loan company, and will be able to buy what you need or solve your issues at once.
When it comes to online loans, you can receive your money on either your bank account or your card. Loan payment can be done through online banking, online wallets, via a bank transfer, or in cash at a pawnshop. Online banking is free of charge while other channels have transaction fees.
Please note that each online loan company may have its own rules and policies regarding the payment method(s), so do make sure to check out your loan agreement first thing.
As all things in life, online loans have both its advantages and disadvantages.
Among the advantages, one can sure mention the following:
However, personal online loans may not be suitable for all, since they have some cons, too:
It is now your choice where you would like to apply for a loan. Wherever it is, make sure to pay on time. That way you’ll have a peaceful life and be free from trouble. The best thing is of course to save money and avoid applying for any loans, but we all may have issues in our life, and there are times when online loans may come in very handy.
Before applying for online loans, verify the company first, check whether it is registered and has the necessary permit. Only then you can compare, which company has the lowest rates.
It is also a must to read thoroughly the terms and conditions or the loan agreement,so that you learn whether there are any hidden charges or any crucial information you should know before you apply for an online loan.