Most people run at the mention of ‘unsecured loans,’ thinking it’s one of those sketchy loans offered with unbelievable interest rates. Technically speaking though, unsecured loans are simply loans that don’t need collateral. This means you don’t have to present any high-value asset like a car, property, or jewelry to get approved for a loan. This high-value item gets taken by the lenders in the event that you can’t pay for your loan. In these cases, a bank takes a look at your creditworthiness through your credit history.
Usually, unsecured loans have a higher interest rate because of the lack of collateral. But now, interest rates are becoming more competitive as a lot of financial institutions are taking interest in these unsecured loans, even if it’s a lot riskier on there end.
So where can you get these no collateral loans in the Philippines? Easy, check out these three financial establishments to figure out which one works for your needs:
- Traditional Banks
If you want a loan, of course the first step would be to go to your local bank. Luckily, unsecured personal loans are just one of the many financing products that traditional banks offer to their clients, with varying payment terms and interest rates. However, borrowers first must pre-qualify for any type of loan from a bank. This means that age, employment status, and credit history or bank history will definitely be checked. But if you pass the process, then congratulations. Once you get approved for a loan from one bank, your chances of getting approved by another bank gets higher. But don’t go loan shopping because you’re going to be the one to lose in the end… especially if you wouldn’t be able to pay for it.
- Multi-purpose Cooperatives
Multi-purpose cooperatives exist to extend support for their members. That’s why they offer such a wide variety of financial and investment vehicles such as savings, time deposit, and even loans. Most often than not though, these products are only available to members of the coops or at least employees of parent organizations. If you’re a member or an employee of the company, you still have to go through some processes to get approved, and usually the granting of the loan is solely based on the discretion of the cooperative’s officers.
- Private Lending Companies
If you need cash quick, private lending institutions are the way to go. Most of these establishments boast their fast approval time to get more customers so it works for you. A lot of these private lending companies are now available online, so you don’t need to go all the way to a physical location just to borrow money. However what you have to understand is this: First, you still need to submit requirements via their platform or through email. Next, most of the time, your first loan with them has a small principal amount. That’s the main reason why they can actually process a loan faster.