Many Filipinos may find the need to take out a loan every now and then. But sometimes, the amount they need is relatively lower than the amount traditionally taken out for home or car loans. Some need fast loans to pay off a small debt, a utility bill when their paychecks are running late, or an emergency that throws off their budget.
This is where online loans come in. Convenient, fast, and legal, these loans have helped many Filipinos get through a small financial speedbump.
If you’re considering taking out an online loan, here is what you need to know about it as well as its advantages and disadvantages.
Online loans are quick and convenient loans that can be availed online without having to go through a rigorous screening process. Unlike regular bank loans, you do not need collateral to secure your loan. It only requires minimal documents for identification purposes. These loans are approved quickly without the need to visit the lender’s office. The amount is transferred to your bank account right away.
Bank loans are traditionally used for bigger items like home or auto loans. This means that the approval process is stricter and requires more documents to ensure a person’s ability to repay a large amount.
Online loans, on the other hand, get approved in as fast as 24 hours and only require documents for identification. However, the amount that a person can loan is much less than what one could get if they apply for a loan in a bank.
There are various types of online loans available in the Philippine market. These include:
It ultimately depends on the purpose of your loan. If this is a significantly small loan that can be paid with your next paycheck and you don’t mind the higher interest rate, then getting a fast online loan may be the faster and more convenient solution.
But if you’re looking for a significantly large loan to buy a home, vehicle, or high-cost property, your only option would be to consider a traditional bank loan. It is not a quick process, but when you’re dealing with long-term loans with smaller interest rates and higher maximums, bank loans are the more practical solution.