Payday Loan in the Philippines
A Payday loan, sometimes also referred to as payday advance or cash advance, is an unsecured loans with a very short tenure. Usually, you are supposed to pay back the full amount on your next payday. Lenders check if the borrower has got an employment before giving out a loan, most of the times.
How do Payday Loans work
When taking out a payday loan you are usually required to verify your employment status. Requirements differ from lender to lender, though. Some lenders require a bank statement, while others require pay stubs or even don’t need any verification (which increases your interest rate!). Also you would have to provide a postdated check covering the full loan amount plus the agreed interest.
Once it’s payday, you are expected to pay back the money in the branch. If you don’t do so, the lender will use the check to get his money back. Of course, you should make sure your check is covered, otherwise the lender will keep pushing on you.
Also, there are some websites that offer online application for payday loans. The only difference is the application process and how the money is transferred. Instead of getting cash you receive your money by direct deposit and the lender withdraws the money from your bank account on your next payday.
Reasons for Payday Loans
There might be times you run out of cash and some kind of emergency occurs. When you need instant cash and you don’t have any friends or family, that can help you out, payday loans are a good way to bridge that gap. However, most people take out payday loans to cover ordinary living expenses. Considering the high interest rate, you should don’t make that mistake.
Risks that come along with a Payday Loan
When taking out a home loan, you should consider the extremely high interest rates! You might be able to serve the interest over a short period of time and it doesn’t appear to be that high, but most people fail to repay a payday loan without taking out another loan. A personal loan is the better alternative in most cases, for sure.
Alternatives to Payday Loans
Before taking out a payday loan, make sure you check these alternatives, since they usually have a much lower interest rate!
If you own a car, you can use your car for securing a personal loan, which lowers the interest rate. Also, home loans in general have a lower interest rate than payday loans. Since the installments are stretched over a certain period of time, you are less likely to fail your payments. In addition, check if your credit card provider offers cash advance, maybe your friends or family members can help you out, or even your employer might grant you a small loan amount.
Currently we do not offer payday loans, especially due to the high interest rate. You can also use our online tool to compare personal loans in the Philippines, to help you find which is the right one for your need.