Category Archives for "Loan"

How Salary Loan Works In The Philippines?

Salary loans or Payday loans, how many like to call them, are monetary funds provided to borrowers, which must be paid in full or in installments when the borrower receives the next paycheck. The amount you can borrow is relatively small and is based on your monthly income.

However, keep in mind that these types of loans usually involve high-interest rates, which isn’t a suitable solution for many people. In the end, you are repaying much more than you initially borrowed. So, now, you must be wondering why people take salary loans when they are so unfavorable?

Well, you may need some quick cash to pay for emergency situations, such as car repairs, utilities, or on the spot medical expenses. Therefore, if you think of applying for a salary loan, then you must consider whether you are responsible enough to pay off your installments on time. In case you fail to meet any payment, the lender will impose additional charges and fees.

So, let’s see how they work in the Philippines!

Getting a salary loan through a government

Some companies provide Pag-IBIG loans for their employees, while others don’t. However, if you wish to apply for this type of loan, then you must complete the following steps.

First of all, make sure to get familiar with all terms and conditions before you head to the nearest Pag-IBIG branch. Additionally, you should bring copies of government and employment issued IDs, the latest payslip, as well as an application form.

On top of that, you must show the original valid IDs so that the loan officer can start with your application. It will take at least two weeks for your request to be approved. The amount you can borrow is based on your monthly income.

Getting a loan through a social security system

Only people employed or currently self-employed can qualify for the salary loan program. However, as with the previous one, you must meet specific terms and conditions to be able to apply for a salary loan.
For instance, if you request a one-month loan, then you must have 36 posted monthly contributions, and six of them have to be in the last six months. Additionally, if you are applying for this type of service, then your employer should be updated in contributions and loan remittances.

When it comes to the amount you can borrow, it depends on your average monthly income in the past 12 months. On the other hand, if you wish to apply for a two-month salary loan, the amount cannot exceed P24,000.

Considering the repayment terms, a one-month or two-month salary loan can be repaid within two years, in 24 equal monthly installments. The interest rate is 10% per year, and it’s applicable to the entire loan.

If you fail to pay your installments on time, then you will be charged with an additional 1%.Keep in mind that the lending company will charge you a processing fee of 1%.

How Can I Loan My Sss Salary?

If you are self-employed or employed Philippine citizen, and you are a member of the social security system; therefore, you are eligible to apply for an SSS loan. The Social Security System provides plenty of benefits to its members, including various types of loans.

These benefits are available for all members, including 1.3 Filipinos working overseas. Now, you must be wondering why do you need a SSS loan. Well, maybe you have some cash emergency, or you need to cover some medical expenses, or even pay your bill.

For that reason, we are going to guide you through this process and help you apply for an SSS loan.

Check your eligibility

If you are currently employed and contributing to social security, then you are probably eligible to receive this type of loan. However, you must be under 65 at the time of application.

People who want to apply for a one-month salary loan, then they must have at least 36 monthly contributions to social security, while six must be made in the last 12 months. On the other hand, for a loan equivalent to two month’s salary, you must make 72 monthly contributions, six of them in the last 12 months.

Make an account

Go to the SSS registration page and select the option, to begin with, this process. You should fill out an online form to finalize registration.

Next comes the salary loan application. For that, you need an account because you will use it to apply for an SSS loan.

In the application form, you will have to enter your personal, as well as employment information. On top of that, you must state the amount of loan you are applying for, but also how you want to receive it. For people who are employed in companies, your employer will have to fill out one section as well.Submitting your application is the final step in this process. If you are employed, make sure your employee has the account to verify your employment.

Alternatively, go to an SSS branch

Research the nearest branch at the SSS page to find the most convenient locations. Keep in mind that SSS loans are also available for people working overseas. However, make sure to contact the nearest Philippine embassy for additional information.

On the other hand, if you are an OFW member, and you can’t locate an SSS branch in the country where you work and live, then you can authorize a family member in the Philippines to submit an application instead of you.

Receiving the loan

If you meet all the terms and conditions of the SSS loan, then you will be approved immediately. People who live in the Philippines will have funds directly deposited into their bank account. Others can choose either to get a check or credit card via mail.

In most cases, the loan is payable in 24 monthly installments, therefore, make sure to follow specific terms of the loan. Keep in mind that your due date depends on whether you are self-employed or employed.

What Are Salary Loans?

Are you always short on cash as the end of the month approaches? Do you often feel embarrassed to borrow money from family and friends? Well, the salary loan might be something to consider, especially if you need money to fund emergency financial situations.

So, now you must be wondering, what are the salary loans? Basically, they are short-term loans that are offered to borrowers to bypass time until their salary arrives.

In this article, we will try to explain their use, as well as terms and conditions you should fulfill before you can submit an application.

Why do you need a salary loan?

The majority of people use salary loans to fix some emergency expenses until they get paid. It is specially designed for employed people who are trying to make ends meets. Additionally, you can use the salary loan during one-time emergencies.

For example, maybe you have booked airline tickets on the 20th of the month, and you don’t have enough money on your account. What do you do? How do you pay your airplane ticket? If you have a credit card, you can simply swipe your credit card to manage this expense. But, what if your credit card bill is due before salary, or maybe you don’t own a credit card?

Where do you get a salary loan?

When it comes to this type of transaction, there are plenty of online lenders who offer traditional salary loans. However, this is a tricky part, to get affordable loans, you need to find a reputable lender who is willing to provide you with decent interest rates.

After all, the biggest issue with salary loans is that they come with high-interest rates, and if you aren’t careful enough, you may end up in bigger debt than you were.

Who can apply?

Only people who are employed can apply for a salary loan. However, if you are self-employed, you may not be eligible for this type of loan. Pay attention to certain online lenders who do provide salary loans for specific cases. Those are usually startup lending companies that promise loans within a few minutes.

It’s hard to guess whether they can offer decent lending conditions, and you might be required to upload your bank statement, salary slips, ID, and others, to apply for a loan.

What is the interest rate?

Well, interest rates mostly depend on lending companies; however, they shouldn’t top 2.5% per month. Since salary loans are short-term short – term loans, the interest rate shouldn’t be that high. On the other hand, if you fail to meet the payments, then interest might increase.

The processing fee is another thing you should worry about, and it might be as high as 4%, and they are all paid upfront. Also, keep in mind that some lenders calculate interest on a daily basis, which can be a considerable disadvantage.Therefore, make sure you can really meet their terms and conditions before you apply for a salary loan.

What Are Salary Loans With A Fixed Interest Rate?

Loans with fixed interest rates don’t change over time. Therefore, this might be a suitable solution for some people, and getting a fixed interest is always a good option because you always know the costs.When you borrow money, you pay off the loan by paying the interest.

Additionally, they might include additional fees, but interest usually determines how expensive the loan is. For that reason, it’s crucial to understand how interest rate works and whether you can change it.

What is the fixed interest rate?

Nowadays, you borrow two types of loans, the ones that come with fixed interest rates and the ones that feature variable interest. When it comes to a fixed rate, you will pay the same amount over the life of your loan. This is an important thing to consider because the interest rate affects how much your monthly payment will be.

Down payment assistance form and dollar banknotes.

For example, if the interest increases, so will your monthly payments. Eventually, you might end up in a situation where you won’t be able to afford these higher installments. Additionally, the rising interest rate will also increase the price of whatever you bought. In this case, you will spend more money on interest, but you won’t be able to increase the value of the thing you bought.

Safe loans

Fixed interest salary loans are generally more reliable than variable rates. In this case, you know what to expect and how to plan your future. On the other hand, you had probably heard countless stories of people who suffered “payment shock” when the variable interest rates went up.

However, even with a fixed interest rate, you still have to pay for safety because nothing comes for free. Initially, variable rate loans are lower than fixed interest rates; however, this situation can change in a second.

When is the fixed interest rate the wrong choice?

Sometimes a fixed interest rate is not a suitable solution, but you can hardly know this ahead of time. For example, if the rate falls, but you already sign a contract, you won’t have an option to change terms and conditions. In this case, a variable loan might have been a better deal.

Unfortunately, you can never time an interest rate because numerous factors impact its development. Some variable interests keep the same rate and then suddenly drop or increase. However, if you hope to pay off your salary loan, then it makes sense to take a loan with a variable interest rate.

Short-term commitment

Initially, salary loans are designed as a temporary solution to fix your financial emergencies. However, they usually come with a high-interest rate, so it’s worth considering whether you should take such a loan over a variable one.

Therefore, it’s essential to find a reputable lender who will offer you decent terms and conditions. Before you submit your application, make sure to get familiar with the loans they offer, as well as interest rates. Don’t trust companies that don’t have a reputation in this industry. Otherwise, you may end up in bigger debt.