5 Practical Ways to Borrow Emergency Cash

According to the latest financial inclusion study conducted by the Bangko Sentral, 41 percent of adults have outstanding or past loans. There are many workable ways of borrowing that include emergency and personal loans in the Philippines. These solutions are helpful if you need money right away, particularly during lockdowns or natural disasters. However, before picking the best one for your current needs, it is necessary to grasp both the benefits and the hazards of any credit choice. Some of them are discussed here.

Emergency Loans

An emergency loan is a personal loan, which can be borrowed to cover unanticipated costs. Filipinos who do not have enough money can fund the repairs of their property after a flood, fire, or earthquake, quickly and easily. The Philippines has three main sources of emergency loans: private lenders, government organizations, and business people.

Sean Martin D. Plantado, a finance specialist at Digido Finance Corp. notes that the two most common types of emergency loans online in the Philippines are related to accidents and medical reasons.  People also often take out emergency loans for many other needs, such as urgent purchases or service charges.

Emergency Loans from Private Lenders

Private lenders have the easiest application process, fastest approval, and disclosure of funds among the three popular providers of emergency loans as they do not usually require a bank account. Many requests for emergency loans may now be submitted online which can be granted within 5 to 10 minutes. You can also obtain money through the online “pautang” on the same day.

This is why emergency credits appeal to people with little or poor credit history and the unemployed. Unemployed Filipino emergency loans are perfect for ASAP cash but will not be approved by banks because of no income evidence. Emergency lending is notoriously expensive in the Philippines, as interest rates range from 1% to 1.5% per day, which is equivalent to an annual percentage rate of roughly 500% to 3,000%. Furthermore, it is available with very short durations, so you have very little time to pay back.

Emergency Loans from Government Agencies

The SSS, GSIS, and Pag-IBIG Fund help natural disaster sufferers. Compared to private lenders, they offer lengthier payback durations and much cheaper interest rates. However, you must be an active member of these agencies and be able to qualify for a loan with continuous contributions of a minimum of six months.

Emergency Loans from Employers

Some firms in the Philippines provide disaster-affected workers emergency loans. Others make these loans as part of the benefits that their employees can use for emergency situations. They usually do not charge interest and payment is convenient and flexible as it is deducted from successive paychecks or 13th month pays. An emergency financing program might be offered in your workplace so check it out in the HR department.

Personal Loans

If you need a larger amount, you can apply for a personal loan. Banks have strict obligations and processes for credit investigation of borrowers. Credit processing takes three to seven days longer than other lenders. So if you need money immediately, this might not be the choice for you. However, it is a safe, legitimate, and economical option to borrow money with low-interest rates and long replacement terms.

Salary Loans

Salary loans are similar to emergency loans offered by private lenders because they offer quick and easy access to borrowers. But they also have higher interest rates than personal loans given by banks. The amount of salary loans and the stringent standards for implementation is also slightly higher. However, some lenders are able to lend up to Php 50,000 and require fewer revenue proofs, like payment receipts and bank statements.

Pawning or Sangla

All you have to do is to provide collateral like jewelry and electronics that are genuine and valuable if you need quick cash.  No credit checks or revenue documentation are needed.  Packaging companies impose interest rates of up to 1% for a period of one month. But you may not be able to get back your valuables if you fail to pay on time.

Loans from Family and Friends

When you need money, it is easy to ask your family and close friends. There is no documentation, collateral, interest, or due dates of payment to worry about. When possible, you can only refund what you owe. It is no wonder that some Filipinos have their family, and friends in debt. However, you can lose their trust if you cannot pay.

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