Although the Philippians economy is experiencing a dynamic growth, and the annual inflation rate has been on the low, Filipinos still have to battle with high cost of living. Even the salaried Filipinos cannot escape this trap. Every month, day-in, day-out, you have to bear the cost of cost of bills like water, electricity, education, housing, gas, and health. All these bills can drain you every penny you have.
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Tough situations strike without warning. And you could find yourself in a situation where you don’t have enough cash to get by through the month. You have replenished all your savings, your next payday is weeks away, and your friends won’t bail you out. Getting a loan from a friend is not an option possibly because it would feel like you are asking for too much. It is possible they have bailed you out a couple of times.
One of the quickest loans to go for is salary loans, also known as a check advance or cash advance. A cash advance can bail you out from a financial mess that does not require a huge sum of money.
When caught up in financial crisis, and your pockets are low, getting a quick loan can be wise move. Depending on your financial needs, you only need to decide what type of a loan you need for your specific situation. If you want a loan with longer repayment term, possibly up to 36 months, you can go for short-term loans like personal loans. In contrast, if you need a quick loan with a short-term repayment term, you could apply for a salary loan, otherwise known as a payday loan.
A salary loan is a type of a quick loan, which you borrow from a private or online lender. Once you get this loan, the lender expects you to pay it back during your next payday. This quick loan can get you through any immediate emergency. Typically, you receive fairly little amounts, which are calculated based on your gross-income. You only need to be working, and have a valid bank account to get started. Depending on the lender, you could pay the loan in full or in installments.
A salary loan could be just what you need if you want to:
1. PAG-IBIG Loans
In the Philippines, some companies give out Pag-IBIG loans to their employees. The Pag-IBIG fund is owned and controlled by the Philippine government. To get one, you have to go to the nearest Pag-IBIG branch with copies of government and employment issued IDs, your latest payslip, and an application form. You must also show you original valid IDs. Your request will be approved in at least two weeks.
2. SSS Loans
You can also get a salary loan through a social security system – you must be either employed or currently self-employed to qualify for the program. Should you apply for this service, your employer has to be updated in loan remittances and contributions. How much you can borrow is dependent on your average income within the past 12 months. The maximum amount you can get for a two-month salary loan is P24,000.
The interest rate charged on the loan is 10% per year and is applicable to the whole loan. Should you fail to pay your loan installments within the stipulated time, you are charged an extra 1%. Furthermore, the lending company charges you a 1% processing fee.
Between the two categories of salary loans, there are some key-differences
With most lenders, you can borrow any figure within the limit available as long as your current salary can cover the principal loan amount and any extra fees payable as interest.
Typically, you can borrow any amount ranging from PHP2,000 and PHP50,000; depending on the lender.
The repayment period for Salary loans offered in the Philippines will depend on the terms agreed upon between you and your employer/ lending company. Depending on the financial lender, the payment terms can widely vary. Although you are expected to pay the loan on your next payday, some lenders could give you flexible payment terms. You could be in as few days as you want. Alternatively, you could pay back weekly, bi-weekly, after a month, or even after 3 months. In some cases, the loan can have a repayment term of of 36 months***.
You to meet particular requirements for you to be eligible for a salary loan in with financial lenders in Philippines. For employees who work for accredited companies, they must:
Before you apply for a loan with any lender in the Philippines
Before you even apply for salary loan online, be sure to estimate how much you will pay back in total, fees payable, and the amount that covers each installment.
Most online lenders have a salary loan repayment calculator to help you estimate how much you will pay in interest rate, plus the total loan amount payable. These tool will estimate how much you will pay in a given number of installments.
Let’s say you borrow PHP 20000, where the lender expects you to repay within 61 days, as per your chosen repayment term.
Assuming the loan charges an interest fee amounting to 0.9% per day, you would pay roughly PHP 3098. If you choose to repay in four installments, you would pay PHP 905 for every installment.
If you wish to estimate how much you would pay for a quick loan, simply search for "Salary loan calculator Philippines."
If you are want a loan from your company you only need approach your HR personnel and inquire for an application form. From there, fill the form with relevant, valid details. Next, submit your application form along with the documents required to the relevant HR personnel. Your HR department will review the application and possibly approve your salary loan within a few days. Usually, as fast as within a few hours but it can take up to 3-4 business days as with Security Bank.
However, if you are going through a different channel, such as through an online lender, applying for the loan is quite straightforward.
On the website of your target lender, navigate to the web-page that has the application form.
From there, complete the loan application form with the valid details. You most likely first to start with the basics. Specify the amount you want to borrow, your repayment period, and the number of installments you wish to do.
You could opt to pay the loan within two installments. Alternatively, you could choose four or even six terms.
Once you are done with the online application request, the next step is the verification process.
This can take from 15 minutes to 24 hours, depending on your financial lender. Most likely, you will get a SMS notification regarding your approval status. If your loan is approved, the lender will wire the cash to your bank or credit card.
When shopping for a check loan, it is not unusual to make some obvious mistakes as a borrower. Still, if you are in the look for the following typical mistakes you will be good to go:
1. If the deal is too sweet, think twice
Yes, you could have a huge appetite for quick money right this moment. Take your time to review what kind of loans options you have. Don’t necessarily go with the first deal that comes your way. Also, as they say, should the offer be too sweet, give it more thought before you request for a loan. Some services are schemed to profit from your pockets as possible. Be aware.
2. Don’t rely on one income source
Although your current job may be enough to secure a check loan, always work to have multiple income sources. Your job is not always a guarantee. Supposing a misfortune like job loss or an illness was to strike, you want to be in a position to repay your debt. In case, all your salary goes into covering the loans’ expenses, you will have some extra money to manage your unforeseen expenses.
3. Should you fall behind in payments, break the silence
It is always a wise move to notify your lender should an unpleasant situation arise where you’re unlikely to forfeit on your minimum repayments. Notify your lender. Together, you probably can come up with a working arrangement. Even if most cash advances don’t come with penalty fees, you will probably need extra money in the future. Maintain a great credit reputation.
4. Be keen of the interest rates
If a loan comes with high-interest rate, the amount you pay in total will be significant.
5. Choose a loan repayment that works for you
If you are unsure about the proposed contract of a loan, consider your capacity to repay the loan. You may need to recalculate the repayments options you have.
With a salary loan, you can sort out pending bills that need attention. Remember, the amount you get with a salary is fairly little. The loan will most likely help you cover short term necess.