Cash loan without collateral in the Philippines – You never know when you will need a quick loan. While most of our financial decisions are planned with particularity, undesired incidents and unplannable purchases may throw a strict planner off balance. In such cases, having a reliable source of cash is invaluable. Unfortunately, many companies issuing loans often require clients to have collateral.
What Is Collateral?
When you apply for a loan, the bank or any other financial organization usually demands some form of guarantee that you a loan will be repaid. Collateral is a pledge of property or other valuables that can be sold to guarantee repayment.
The exact value of property matters only to a certain degree since most people will try their hardest to repay a loan with their home as collateral.
Most banks usually ask for something that clients depend on as collateral:
- Real estate property is the go-to type of collateral due to its gradual increase in value and the fact that inhabitants are quite dependent on having a roof over their heads.
- Cars and other luxuries can be used as collateral similar to real estate. However, since the value of such things tends to decrease over time, banks may hesitate to accept them.
- Stocks, bonds, and other financial assets can be used for a cash loan but only in specific cases when an organization issuing a loan has qualified personnel to evaluate assets.
- Obviously, pawnshops accept jewelry, small devices, and other valuables but for many such cash loans are the last resort since the size of the loan is determined by often unqualified evaluators.
Taking a Cash Loan Without Collateral
There are several reasons why people seek regular minor financial aid:
- Your property may be already in use as collateral;
- You don’t own anything valuable to offer to a bank;
- Available assets take way too much time to be evaluated;
- There’s simply an overabundance of paperwork that you would like to avoid.
Regardless, any person needs to have an option to take out a small sum of money from a trusted company without increasingly complicated bureaucracy. Such options provide more than just a way to pay for car repairs or unexpected medical bills, they offer a sense of financial security and allow people to make purchasing decisions with confidence.
Advantages of Cash Loans Without Collateral in the Philippines
Despite banks offering bigger credit, many people still prefer working with smaller financial institutes and pawn shops.
There are many advantages to getting a smaller cash loan:
- The paperwork is quick and does not demand your active participation;
- You don’t need any evidence of stable income;
- The whole procedure takes under 30 minutes;
- You can repay the debt at any given moment without strict scheduling of installment payments;
- Many modern loaners use automated systems to make the process even faster.
Such undeniable upsides benefit all potential borrowers but some enjoy them better than others. The fact that you don’t need to provide collateral when interacting with services such as Digido focuses on offering quick, small-time financial aid caters to a very specific audience.
Freelancers, students, retirees, and other people without any stable income covering all of their expenses may require such financial services more often than others. At the same time, many students and freelancers may not have anything valuable to offer as collateral.
Requirements for borrowers
While online financial institutions may not require as much paperwork to issue a loan, there are still some important, unavoidable procedures that you have to undergo in order to qualify for financial aid.
Since you won’t be providing any guarantees of repayment, the organization will verify your identity using several methods:
- Checking your ID (you will need to upload an unedited photo of an ID);
- Verifying your phone number via SMS;
- Gathering financial and even personal information about a borrower.
All clients must answer a few questions about their financial situation including reasons for borrowing money, monthly income, current housing situation, etc. For example, Digido does not require borrowers to own a home or prove their income, but general questions will be asked and the identity of a borrower will be verified.
The last and most important part is that your credit history will be looked at. In many cases, companies that offer smaller loans do not focus on this particular aspect too much. However, a very bad credit history may affect the likelihood of you receiving any good offers from various banks and financial companies.
On the other hand, cash loan without collateral in the Philippines – Digido uses its own system of evaluation of borrowers that takes into consideration how much you personally borrowed and repaid. If repay everything you owe fully and on time, you may receive a much higher credit cap for the next loan. In such situations, your previous obligations do not matter.
Should You Take a Loan?
There is a huge incentive for many people to make impulsive purchases and borrow money just for the sake of borrowing. However, such financial policies do not work in the long run and may significantly affect your chances to use credit in the future. Before taking a cash loan, think twice.
Ask yourself several questions:
- Do I need a cash loan right now?
- Is there any other way to solve my problems?
- Do I need to make a purchase using credit?
- Can I repay the debt in time to avoid compound interest?
- Do I have options to refinance my debt in case of emergency?
- Can I take a smaller sum of money and tighten my budget?
If you can find a better solution or stay away from unnecessary purchases, it is generally a good idea to forgo an opportunity to become dependent on others for money. On the other hand, some people may use such loans to increase their credit cap and ensure that they can borrow bigger sums of money in the future when it is required.
So, what do you think about cash loan without collateral in the Philippines?)
The Main Takeaway
A cash loan without collateral in the Philippines is a great source of credit for people who are in dire need of immediate financial support. Digido is one of the finest providers that offer such loans on short notice and without any guarantees of repayment.