If you don´t know how to take credit in the Philippines this article can be interesting for you.
How To Take Credit in the Philippines
Take only the amount you need
Loan companies will often ask you to pay more than you asked for. Do not be tempted. Take the amount you really need. You will have to pay it back with interest and you should not burden your budget with more than you really need.
The shorter the term of the loan, the less interest you will pay. That’s why it’s a good idea to take out a loan for as short a term as possible but with a comfortable payment. Loan payments should be no more than 50% for a mortgage and no more than 30% for a consumer loan. After all, life should be in pleasure, and if almost all the money you have to pay on loans for life itself and the pleasure of money is no longer there.
Many banks offer insurance when taking out a loan. On the one hand, it can really be of great help if there is a threat of layoff or you are the only breadwinner in the family. Paying a few thousand extras, in this case, can be a good service if you do have to use this insurance. The insurance companies usually insure against unemployment and disability, so that if these risks occur, the insurance company will pay the debt instead of you. If you have a good job where they value you and don’t want to leave you, or if you have a separate life and health insurance, this expense can be waived, so your payout to the bank will be lower.
Important note: Even if you took out a loan with insurance, you can cancel it within two weeks. If you were unable to negotiate with the bank yourself, an experienced lawyer can help you write a letter to waive the insurance if you are certain you will not need it and do not want to overpay.
Comparison of banks
The bank that you get your salary from is usually more loyal and can give you a loan without supporting documents. But don’t make any hasty decisions. Do not be lazy to apply to different banks, perhaps someone will offer you better conditions?
How to repay the credit in the Philippines
If the credit is already arranged, then there is another question – how to return it correctly?
The most important thing is to pay each payment on time. You should not procrastinate and be late with payments, it can ruin your credit history.
If the credit is a significant part of the income and it is difficult to pay it, then you can apply to another bank for refinancing, or even ask your own bank to review the terms. But this can only be done after a few months from the beginning of the loan.
It is advantageous to renegotiate only those loans on which you pay less than half of the term, because the bank takes the interest first, and after half of the term begins to pay the debt itself.
If you got the loan right and you feel comfortable paying it off, consider paying it off early. The sooner you pay off the loan, the less you will end up paying.
There are two options for early repayment: reduce the amount or the term.
If you reduce the amount you have to pay off your loan early, the repayment term will stay the same, but your monthly payment will be lower. This is advantageous if it is difficult to pay back the loan and you were able to make early repayment through a one-time payment (bonus or bonuses). A smaller payment will be easier to pay, but the overpayment in this option will remain substantial.
- If you reduce the term, the monthly payment will remain the same, but you will close the loan faster. If you want to pay back the loan comfortably, this is the better option.
- If you want to repay regularly more than the minimum payment, it doesn’t matter what you choose – the term or the amount, because in both cases you will get the same amount of payment.
Either way, be careful with loans and look for an opportunity to make a purchase with your own funds. Think about it, why is there enough discipline to pay the bank regularly, but no discipline to pay yourself to build a cash reserve?
The main advantage of a consumer cash loan is that you can quickly get a small amount for an urgent purchase. You can apply for a loan in the office or on the lender’s official website. The decision on the application is made on average from 15 minutes to 3 hours. In some cases, the verification procedure may take several days. To speed it up, apply to a bank you know: a payroll bank or one where you have a credit card, deposit, or debit card.
Philippine Banks that grant loans urgently on the day of application
Here are the main advantages of cash loans:
- The requested amount is issued in full and immediately after the contract is signed. You no longer need to borrow money from friends or collect money from every paycheck to buy the thing you need.
- Repayment is done in a convenient mode according to a schedule, without a large burden on your family budget.
- Consumer loans are available for any purpose. The client does not have to report what he is going to spend the amount received.
The Bank is a serious financial institution, activities of which are regulated by law. The client can have no doubt in the transparency and reliability of the transaction. Such a guarantee cannot be provided by private lenders. The main thing is to carefully read the terms of the contract before signing it.
- To get a loan, you need only a passport of the Russian Federation and a certificate of income. When requesting a small amount, the bank does not require collateral or guarantees from third parties.
- Debt can be repaid before maturity without commission and interest overpayment.
- A wide range of products for all purposes and terms. Line of credit is regularly updated. Almost every organization has rates with reduced rates and increased limit for regular borrowers.
- Ability to improve credit history if payments are made on time. Solvent borrowers who are diligent in fulfilling their financial obligations get access to better credit products.
Inflation adversely affects the amount of money accumulated and the cost of goods is constantly rising. Considering these factors, a loan with interest is more profitable than a long accumulation of your own funds for the necessary purchase.