There is still a considerable number of Filipinos who remain “unbanked” or without any bank accounts. In fact, the Central Bank of the Philippines noted in a survey released in 2017 that “only two in 10 families have been saving their money in banks.” The Central Bank noted that the country still has a long way to go in terms of setting up a more inclusive financial system.
But while it may be easy to convince people to open a bank account, may of them are still hesitant when it comes to seeking loans from banks. Many people are usually intimidated by the bank’s very strict requirements. For them, the red tape is too much trouble, especially when they only want to load small amounts.
As such, many of them resort to informal means of securing loans. One very popular practice involves surrendering their payroll ATM cards (along with the PIN) to individual lenders (some are tagged as “loan sharks”). In a way, the cards are used as collateral to secure loans. The informal lenders give them cash in advance and collect payment through their ATMs. This is a rather risky arrangement because the lender has full control over the borrower’s payroll ATM card.
Filipinos must be informed that they can seek legitimate loans without going through banks or through dubious lenders. Here are the ways that they can get no-fuss loans:
1. Loans from family members. This is, perhaps, the easiest way to get a loan without having to submit a lot of documentation or ID. Your relatives will often give you the amount you need and just say, “Pay when you are able.” However, this is a practice that is easily abused, as we have encountered numerous cases of relatives not bothering to pay back their lenders. Yes, there are people who will conveniently forget that they borrowed money from their relatives.
To make sure that there is a degree of professionalism in this arrangement, it may be best if the relatives sign a contract where the lender is assured that he or she will get paid. It should specify penalties in case the borrower forfeits on the agreement. This is pretty much what Linda Stern of Money magazine advises in her article for CNN Money.
Since family members are involved, the contract’s terms most likely won’t be that strict.
2. Loans from community cooperatives. The smallest local government unit in the Philippines is the barangay (village). There are villages that have well established cooperatives who offer small loans to their members. Since they personally know their members and know where they live, they can grant loans faster without demanding any collateral.
The administrators of the cooperative will require borrowers to sign a contract or, at the very last, a promissory note indicating the terms of payment — which includes the deadline.
3. Loans from lending institutions. There are various lending institutions that are able to grant loans. Among them is Asteria Lending Inc., which covers the minimum personal loans amount of P2,000 and a maximum of P10,000 to first-time borrowers. It offers three variants of the loan based on payment terms. They are the following:
Meanwhile, those who are nth time borrowers can borrow up to P20,000, depending on his or her history of repayment and his or her salary.
The borrower must have one of the following government-issued IDs: UMID or new TIN ID; new PhilHealth ID, or drivers license. Then, he or she must have a bank account under his or her name to be able to receive the loan.
Best of all, the application for an Asteria loan is done online. It saves borrowers the hassle of having to physically submit the requirements. As for the repayment, it’s also very convenient. It can be done through Dragonpay Payment facilities that are available in every 7 Eleven, Cebuana, LBC, SM Payment Centers, Robinson Payment Centers, and Bayad Centers. (Sponsored Post)