Need emergency cash after Typhoon Rolly? Here are 5 options for quick loans
MANILA – Amid the howling winds and the pouring rain, we were surprised to receive a delivery yesterday morning. For his heroic commitment to bringing us our utility bill, I gave the runner a generous tip and advised him to go home. With a rueful smile, he said he wanted to but his family’s needs come first. “Salamat kay COVID, marami pong utang na kailangang bayaran (Thanks to COVID, we have a lot of debts that must be repaid),” he confessed.
He is not alone as COVID-19 has infected many wallets over the past six months, leaving the poor even poorer and more in debt.
According to the latest consumer expectations survey from Bangko Sentral ng Pilipinas, household savings are at an all-time low, standing at 24.7% nationwide, and lower for the region of the national capital at just 22.7% for the third quarter of 2020.
These are drastic drops from the 37.8% and 44% figures recorded at the start of the year, or before community lockdowns were imposed to stop the spread of COVID-19.
The devastation that the supertyphon Rolly has left in its wake will likely make things more difficult not only for our rider, but for many families whose homes, communities and businesses have been affected.
With only 1 in 4 families with savings, crisis situations like COVID-19 and natural disasters like Typhoon Rolly leave them with no choice but to take out a loan. Even with the savings, some will still need a loan to get some breathing space as bills and expenses pile up.
If you have to take out a loan, where can you go? Not too far away apparently, as banks, credit card companies, pawn shops, and loan applications all compete for your business and all promise easy application, quick approval, and quick release of money. . But before you say yes, think about all of your options so that your loan makes it easier for you now and doesn’t turn into something you’ll regret later.
# 1 Check with your employer first.
Many employers offer a payroll loan or emergency loan to help employees who are under cash.
More often than not, their interest rates are lower than what you would get from a bank or credit card, so it’s worth checking out.
Applications should also be easier, as they are usually handled through human resources and payments are made by payroll deduction.
# 2 Also consider SSS, GSIS, and Pag-Ibig.
Whether you are an employee of the private sector or the government, your compulsory contributions that go to the social security system, the government services insurance system entitles you to some of their loan products, from general purpose loans to calamity loans.
Check the rates and payment terms and compare them to your employer’s before making a decision. Sometimes you may need both – a loan from your employer and a loan from SSS or GSIS and PagIbig.
Just make sure you don’t take out too much of a loan that has very little of your salary left for your family’s living expenses.
# 3 Try to approach your family and friends.
I don’t generally recommend it, but tough times call for tough choices. If you have family or friends who are in a better financial situation, try applying for a loan.
Prepare your arguments: (1) explain why you need the loan; (2) suggest an interest rate; and (3) confirm a payment schedule. If you can have it in writing or give them post-dated checks, it will increase your chances of getting a Yes answer. But if they turn down your loan application, they may be able to offer their help in another way, so don’t give up too soon.
Do you have any jewelry that you might need to pledge? Why not sell to your family and friends instead, as they can give you a better price than the pawnshop. You can also discuss redemption options when your cash flow improves.
# 4 Banks and credit card companies come next.
Many banks today offer personal loans, which are unsecured loans, which means you don’t need a guarantor or collateral. Credit card companies also offer cash loans that you can withdraw based on your available credit limit.
Note that this isn’t about how easy your credit card cash advance is, which I don’t recommend just because of the high interest, but also the way the interest is calculated.
Whether with a bank or against your credit card limit, the advantage of these loans is that you know how much you have to pay each month and for how long, and can budget the payments against your salary. .
But you have to ask what happens if you are unable to pay. Will the interest rate be recalculated? What are the sanctions ? Read the fine print before signing on the dotted line.
# 5 Beware of online credit and loan applications.
A quick online search will show you many options for applying for a loan through the internet or from an app. Like Option 4, most of them are also unsecured loans, but unlike Option 4, their interest rates are much higher.
Most of them require waivers of privacy and access to your social media accounts – that’s a wake-up call – as previous cases have shown that customers who weren’t able to pay were identified as such in their Facebook accounts.
The government is cracking down on this ‘shame game’ tactic, but in the meantime your reputation may have already taken a hit.
As with any financial decision, it’s best to do your homework to get the best deal for you and your family.
Warning: The opinions expressed in this blog are those of the blogger and do not necessarily reflect those of ABS-CBN Corp.