Many Filipinos often borrow cash for their day-to-day expenses. Nowadays, various solutions are offered to assist borrowers in meeting their financial needs.
Finances can be confusing, and the options available can be overwhelming. Whether you need a short term loan, want to compare different types of loans, or just want to make sure you’ve made the right choice for your needs, this article has it all!
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What Do You Know About Short Term Loans?
What is a short term loan?
In short, a short term loan is a finance solution extended for a fixed period. For example, you can lend money from one financial institution up to a certain amount for one year or six months, or three months only.
This typically involves an interest rate fixed over the payment period but reflects market rates when the agreement is initiated.
Most Filipinos often take out this financing to cover their expenses and emergencies when low on cash. At the same time, business owners use this finance solution to keep their businesses afloat.
The borrower can decide the repayment period on their own, usually one month. However, the term can be longer, and it typically lasts no more than 12 months.
Consumers don’t need collateral to secure the borrowed cash because it is unsecured. However, these types of cash lending have higher interest rates overall because of the risk that they may not repay the cash, and the risk factor is higher too.
Types Of Short Term Loans Available In The Philippines
This is a small, short-term, high-interest loan. It’s typically from PHP 1,000 to PHP 30,000 and must be repaid in full within 28 days or less (usually on your next payday).
The interest rates are much higher than from a typical bank, and consumers can use the money for anything from car repairs and home improvements to paying their rent and utility bills.
Line of Credit
This type of financing in the Philippines is also a type of unsecured one in which the borrower has access to a pool of funds, but they do not have to repay it in full. The payment period is usually over six months. To relend, you must fully pay off the cash.
Line of credit is most often used by businesses to supplement their income or by individuals who may want extra money and need funds while they don’t know when they will be able to get paid again.
The internet has opened up many opportunities for easy access to information and services, in turn opening up a whole host of new opportunities for people, as demonstrated by the explosion of online finance solutions.
You can grant this financing electronically without any physical contact with the lender. It allows lenders to access cash from various sources, such as banks, credit unions, and online lenders. This is quite similar to a payday one; only the procedures are done online.
Get money immediately with online loans
For those who are unfamiliar with the term, invoice financing is when a lender provides a loan to a business based on the value of unpaid invoices.
This type of financing is typically an option for new or established businesses that need additional working capital or when cash-flow difficulties arise.
Line of Credit
Merchant Cash Advance
A Merchant Cash Advance is a type of debt financing that allows retailers to borrow cash and use it for their business. The amount lent is based on the total credit card sales during a specific period.
This financial product has been increasing in popularity over the past few years due to its relative convenience for business owners instead of the traditional one, which banks and other lenders typically give. But there’s one thing you should consider: its high-interest rate!
See also: Fundko Review – Reliable Loan Bridge
Best Providers In The Philippines
Lending is a very difficult part of business, from the moment you start your credit counseling and contact the lending institution to the actual drawing up of the cash contract.
Luckily, for business owners or individuals in the Philippines who do not want to be bothered with this process anymore, online service providers can help them get a cash advance within 24 hours. Here are some reputable applications that you can find on the internet:
Not all applications have the same terms and policies; you need to research in advance the repayment terms and interest rates before borrowing cash.
Steps To Get A Short Term Loan
- Conduct research and find the best lender
Don’t risk your hard-earned cash with shady lenders. Check online feedback and reviews before applying for your money seeking. Find out if they are legit, have a bad reputation, do collection practices, or do unethical lending before choosing who to work with.
- Prepare necessary documents
Lenders to transient lending usually just need a valid ID, proof of billing, and income. The best thing is that it only takes minutes to be approved if you have already prepared all the required material.
- Complete the application form
Provide the necessary information and ensure that your contact information is up to date and accurate. A properly completed application will also speed up the approval and verification process.
- Wait for Your Approval
Typically, money providers will prompt applicants for approval a few hours after you’ve completed all of their requirements. However, this will also depend on the number of applicants that the lenders are processing. It can be up to a few working days.
- Understand the policies and conditions
Agree on a loan
Borrowing fees, interest rates, and charges are important things to review. When everything is reasonable and meets your needs, you sign the application. The things left are to wait for the money to be disbursed.
It’s been a great pleasure to help you find the right short term loan for your demand. We hope that this article has given you some clarity on getting started.
However, you must carefully look at your options when choosing the right finance solution for your needs and goals before making cash transactions with a bank or another entity on the market.
See also: SurityCash – Loan Solution Finances