Ways to Get Emergency Loan in the Philippines

According to a survey conducted by Bangko Sentral ng Pilipinas (BSP), almost half of adults in the Philippines have outstanding loans. It reflects how embedded the “loan culture” in the country is that there are tons of options available to borrow money available for Filipinos.

Emergency Loan in the Philippines

Before the time of e-money and smartphones, cash loans required onsite appearance to apply, and the funds were issued in person. While this still happens nowadays, there are easier ways to get a cash loan with the help of technology. It is most useful for many people during times when immediate cash is urgently needed. These days, getting an online loan in the Philippines is common and many people are being enticed with its convenience.

Although, this type of convenience is not accessible for everyone. Some needed to resort to more traditional options to get access to express cash and be able to attend to their urgent needs.

Do you have an emergency and need cash right away? Do not fret. This article lists down the various ways to get an emergency loan in the Philippines—from the traditional ones to the most modern.

Emergency Loan in the Philippines #1: Pawning

One of the advices that the elderly people taught millennials is to invest in gold jewelry since they tend to appreciate in value and they can be pawned when emergencies happen. It is no wonder that pawning is one of the most oldest and popular option that Filipinos resort to when there is an urgent need for cash. Until today, there are still a lot of pawnshops in the country especially in rural areas where pawnshops actually outnumber banks and ATMs.

How does pawning work? Basically, borrowers will be lent money by giving an item such as jewelry or gadget as a collateral. They can redeem this collateral once they paid off the debt.

This is a popular option for many people because it is one of the easiest. There is no need for credit checks and document submission for this; the borrowers just have to make sure that their collateral is authentic and of value. At the same time, the interest in pawnshops are smaller than most lenders. They even charge interest rates as low as 1% over a one-month term. However, it can be risky because the item will be up for sale in the pawnshop once the borrower failed to pay on time.

Emergency Loan in the Philippines #2: Salary Loans from Employers

Another popular way to have access to a quick cash loan in the Philippines is through getting an “advance” or a salary loan from employers. People with low to medium salary range usually receive financial aid in this way from their employers especially those who are affected by sudden calamities or sickness in the family.

The interest rate depends on the terms set by the employers. Some companies offer this benefit without interest at all, which is most ideal for borrowers. Repayments are convenient since it usually being deducted from the employee’s salary. The downside is that there is not much option to manage or budget upcoming income since the repayment is not very much flexible.

Emergency Loan in the Philippines #3: Loans from Government Agencies

In the Philippines, there are government agencies (i.e., SSS, GSIS, Pag-IBIG Fund, etc.) that regularly collect a small portion of the workers’ salary. There is usually no option to opt out from these but the advantage is that, those who were able to regularly pay for several years can have access to quick cash loans offered by these entities.

One of the loans that account holders can avail is calamity loan that are specifically made available for survivors of natural disasters in the country. Those who live in an area that is officially declared under a state of calamity, this type of emergency loan is readily available for them.

The advantages of getting a loan from these government agencies compared to the other loan options are the longer repayment options and competitive interest rates.

Emergency Loan in the Philippines #4: Personal Loans via Banks

People who are in need of a higher loan amount does not have much option but to inquire to their banks and check if they can get a personal loan. The upside in applying for a personal loan with a bank it that safety, legitimacy, and security are very much ensured. There are also plenty of banks that actively offer loans to its deposit account holders with good standing, which will make it easier to borrow cash for emergencies. Banks also have a better customer service team in case an issue arises with a client’s transaction, unlike the other options previously mentioned in this list which might not have a team in place.

On the other hand, banks have more stringent loan requirements and credit investigation processes for borrowers unlike the loan providers mentioned above. Also, compared to the ones in this list, banks usually take longer to process loan applications to give time to fully assess the borrower’s ability to repay the loan they are applying for.

The repayment process is also easy and convenient with banks because these are the ones that keep up with the latest technologies to make accessibility better. Most banks have options for online loans these days as well. Just make sure to use the bank’s loan calculator to ensure that you are getting the best offer and that there are no other charges that come with it.

Aside from emergency loans, banks offer all sorts of loans such as car, housing, and others.

Emergency Loan in the Philippines #5: Quick Cash Loans from Private Lenders

For those who are in need of a smaller amount, a quick cash loan from private lenders might be the best way. Private loan providers nowadays offer the fastest and simplest application process and most convenient fund release. Since private lenders can focus on improving their loan products, their offerings are modern and way more convenient than other lenders. Also, it might be because a bank account is not required when applying for a loan with private lenders.

In just a few minutes, emergency loan applications can be filed and be approved right away. Some even offer pre-approved amounts and actively offer it to users so they will be enticed to get the loan even if is is not to be used in an emergency or urgent matter. Some even target and try to appeal to those with low income or poor credit history because these marketing strategy is appealing to this target market—with only a valid ID, anyone can apply without any income documents required.

Many companies offering payment services online are on top when it comes to this product. As the concept of e-wallet or e-money is becoming even more popular in the Philippines after the pandemic, these services are more than just a payment method. They now have a wide range of products that users can avail anytime with just their smartphones. Although the loan amounts are usually small, it is popular because of the accessibility and convenience it offers.

Conclusion

Getting a cash express today is becoming easier. Online lending is more accessible and convenient as years pass. Although, the same rules apply when it comes to borrowing money from whatever source it may be: only borrow what is needed. This is Financial Literacy 101.

It is better to not borrow at all than have dues coming your way each month for expenses that are not really necessary. The process of getting an easy loan is done with just a few taps in our smartphones but the repayment is always higher than what we borrowed. For someone who is not as rich as internet celebrities such as Small Laude, it is better to keep our finances in check than have debt piled up.

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