Growing up in a province in the Philippines, I have always thought that getting a cash loan is quite simple – you can easily go to a relative, to a friend, to your friend’s friend, to your relative’s friend (the list goes on…) and you’re good. It’s not much of trouble really. However, when I wonder about how getting a cash loan in Manila (or in any other big cities in the country) works, I always thought of banks, big lending firms, strict private individuals, and tons of requirements. To be honest, just the thought of the tiresome process already makes me feel stressed and it becomes discouraging which is not how it’s supposed to be. That’s why I did my research and created a guide for everyone who is interested in getting a personal loan in Manila, Philippines.

Should I Get a Personal Loan?

If you’re considering about getting a cash loan, it may mean there’s a big chance that you should. Nevertheless, it wouldn’t come to your mind if you can think of any other resolution to your financial needs. Getting a loan may be your last resort and in certain situations, it’s totally understandable. There shouldn’t be a reason to stop you from getting that small help – unless you know you can’t have it paid back.

Are Personal Loans a Bad Idea?

Loans, in any form, are thought of as a “bad” thing. Most people would say “if you can’t afford it, don’t borrow money to get it” – which is true if we’re not talking about education, health, food, emergencies, etc. If a loan can save your family from hunger, your child’s schooling, your job, your loved one’s life – then who would say it’s a bad idea? You be the judge.

Is it Hard to Get a Personal Loan? 

It could be, depending on where you’re planning to get it from. There are different types of cash lending systems in the Philippines and some of these are provided by certain government institutions, banks, and private individuals or firms. Here are a few things to consider if you would like to know how hard or easy getting a personal loan in the country is:

1. Some banks would only allow you to get a loan if you have an existing credit card with them. Other organizations require that your contribution has reached a certain number of months (just like in SSS) before you become qualified. There are also other requisites such as the amount of your monthly/annual salary, how long you have been employed (or how many years your business has been around if you have one), if you already have an existing loan, etc.

2. Documentary requirements. Most of the time, people get intimidated when applying for a loan because too many documents are being requested from them especially by banks. It can be as simple as a photocopy of your valid IDs or as complex as a copy of a new NBI clearance, Certificate of Employment, and many more. That’s only a few reasons why banks are not the first choice when it comes to getting fast cash loans in the Philippines.

3. Loans, in general, can either be secured or not. Secured loans are those that require collateral (and/or co-makers to back you up) though most of the time, personal loans don’t require any.

4. The whole loan process can take up to 7 days, sometimes even longer than that. As of the moment, online lenders claim that applications can get approved in as early as 24 hours after submission. In ACMF’s case (ACMF.com.ph), “loan can be approved within the day at its shortest”.

Where Can I Get a Loan with a Small Interest Rate?

Some banks in the Philippines offer loans for an interest rate that’s as low as 1.2% while some private individuals offer an interest rate of up to 20% per month. Sure, a very low interest rate is pretty ideal, but you do have to keep in mind though that the rate is not the only thing you should consider when signing up for a loan. As mentioned above, there are a lot of pre-requisites before a certain institution approves your cash advance.

What is my Best Option?

Your best option lies in your current situation – if you are currently affiliated with a bank, as a credit card with them, have a couple of valid IDs, and you’re not really in a rush to get that cash advance, then the bank you’re affiliated with might be the best choice for you. On the other hand, if you need the money in a rush, and does not meet the bank’s qualifications, an online cash loan would be your best bet. Online loans are processed easily, do not demand collateral, and the documentary requirements are not impossible to produce either. ACMF.com.ph is highly recommended for its fast loan approval, low-interest rate, and simple pre-requisites.

If you would like to know more about Cash Loans in Manila, Philippines, you can also go through this article: (link to first article)

Lending or money borrowing is a popular financial go-to in the Philippines and has already turned into a culture for years now. Why not? It has been the easiest solution to financial difficulties of Filipinos may it be a short-term or perhaps, a long-term one. Qualifying for a cash loan in the Philippines can get really simple or difficult depending on the total amount of money you need, documents/files you have on hand, financial capability, the type of loan you’re applying for, and many more factors. For the time being, this article will be focusing on the essential knowledge you need to have when it comes to personal loans.

What is a Personal Cash Loan?

It is a type of loan provided for health, education, household, and/or for any other personal usage. This kind of loan is either unsecured or secured (with collateral) and repayment is normally by adjusted sum payments (installments) over a fixed duration, depending on the borrower’s capacity to pay back from his/her personal income. Personal loans in the Philippines are usually provided with no collateral requirement.

What is a Collateral?

It is a particular asset (house, land, car, building, and several more) pawned as secondary assurance by a borrower. The principal security is usually the anticipated money of the debtor such as his/her salary, business earnings, etc. Even though personal loan in the Philippines require no collateral most of the time, lenders may demand assurance in the event that the primary security is not considered to be fairly reliable or adequate enough to redeem the loan in case of a failure. When collateral is required, it must be documented legally so the lender would have the right to these assets when the time comes. Lenders would then have the legal power to seize and sell a collateral if the borrower cannot pay the loan back as agreed.

Different Forms of Cash Loans in the Philippines and How it Works

Yes, you read it right, there are different forms, methods, and terms of borrowing cash in the country. Listed below are a few (if not all) of the options you can choose from:

• Five-Six Loan. This lending operation started from Indians that came to the Philippines who are often referred to as “Bumbay” (the term’s origins are still debatable up to these days) and is one of the most utilized lending systems up to this day because no collateral is required to apply for the loan. A verbal agreement is sufficient to get this instant cash loan and the rate of interest is often 20% hence the term 5-6 (if you borrow 5, it would be returned as 6). The lender collects payments on small increments on a daily basis for a period of time until the entire amount and interest are fully paid off.

• Private Lenders. All these are private individuals who grant money with interest just like the “Bumbays” but with a difference in terms and interest. Collateral may be required by some depending on the amount of money borrowed and the duration of when it will be paid. Written or printed agreements with signature are also usually demanded for legal purposes.This form of financing system is not often utilized if you need a fast cash loan in the Philippines because of the amount of time it takes and files it requires. It often needs about a week to get processed and the documentary requirements are not that easy to provide either.
• Online Private Lenders. Online loaning system is still fairly new in the country but is becoming more and more popular because of its convenience and security. Online lenders could be a private individual or a company willing to provide short-term loans at the quickest process possible and with fewer requirements compared to banks. Most online loans in the Philippines get within-the-day (24 hours) approval which is a great thing.

Things to Consider Before Securing a Cash Loan

Now that you know your options, it is very important to assess yourself first before going through a loan agreement. Bear in mind that receiving a loan however small or large the sum is, must not be regarded lightly. I have listed some of the things that you need to ask yourself before taking that leap:

• Do you really need to apply for a loan? Think about it thoroughly and decide. Is it a need? Is it a want? Either way, your credit score, name, and financial standing will be on the line and you are the one who’s going to pay it all off no matter the situation so make sure that the loan is going to be well worth it.

• Do you know the exact amount of money you need/will be needing? As things don’t always happen the way they expect them to, it’s ideal to borrow just the significant amount needed. Getting too much or too less than this amount may not be economically healthy for you.

• What is your financial capacity to make the payment? Where are you going to get the money to pay the loan? Would it be from your salary? Or your business perhaps? Out of your allowance? If the money/salary/income you’re expecting wouldn’t arrive on time, would you have other sources? Remember, paying on time is critical and could save you a few bucks as some agencies/lenders charge late fees.

• What is the amount of time you need to pay it all off? Would you be able to pay it in a month, or two perhaps? Would it take more than six months? How about one year? Your predicted duration is very important because your loan’s interest rate can only get higher the longer it takes you to pay it off.

Conclusion

After identifying and analyzing your financial needs and standing, it would be useful to do some research about the company/lender you are going to apply to for a loan. The company or lender’s reputation is your security. Also, take note of all of your readily available documents so you’d know if you would need to process a certain paper while applying for it. Lastly, keep in mind that loans are there to help you – borrowing the right amount of money from the right company can get you through difficult times.