Frequently Asked Questions About Online Cash Loans In The Philippines

According to the Bangko Sentral ng Pilipinas, 77 percent of Filipinos are unbanked or doesn’t have a bank account. Apparently, having a bank account is a basic indicator of financial inclusion because this means you can have access to various services such as savings, bills payment, and loan availments.

Yes, loan availments. This is also the bank’s way of checking how financially responsible you are, which will help determine if they will approve (or reject) your loan application.

What about those unbanked? This is where fin-tech companies come in.

According to financial experts, unbanked Filipinos will decline by 20 percent by 2025 as fin-tech firms help bridge and fill the inclusion gap.

Before you get excited, here are the most common questions asked about online cash loans offered by fin-tech companies:

What is an online cash loan?

Online cash loan is a type of loan that you can apply for directly and online even without going physically to the lender. Application, communication, crediting of loan amount, and payment are online, which means there’s no need to go out.

Unlike traditional loans offered by banks, online cash loans have minimal documentary requirements like government-issued ID and billing statement. This type of loan is also unsecured, which means it is not backed up by any form of security.

More importantly, approval is fast, which could take few minutes to a day. Just make sure to submit all required documents for faster processing. 

How much can I borrow?

Every lender imposes a certain loanable amount. The minimum amount is P1,000 while maximum amount you can borrow is P10,000. Some online lenders could extend up to P50,000.

Take note that for first time borrowers, you cannot avail of the maximum amount immediately. Repeated borrowings as well as paying the loan on time will qualify you for a higher loan amount.

What are the documentary requirements?

This varies per lender but the most common documents are:

• Valid government-issued ID
• Billing statement to check the validity of your address
• Proof of income such as payslip, which proves your capacity to pay
• Certificate of Employment in lieu of payslip

Is credit card needed?

No. Online cash loans are meant to help those who are not given access to financial credit. This means owning a credit card is not among the requirements needed to be able to qualify.

Can freelancers apply?

Definitely. The purpose of fin-tech companies is to fill the gap and provide financial services to those who are often shun by banks. Just make sure you can provide proof of income for the past three months to show capacity to pay.

How can I receive the money?

You can get the borrowed amount through any of the following:

• Bank transfer
• Coins.ph account
• Cash pickup from remittance companies
• Credit to digital wallet like Lazada wallet

Are online cash loans legitimate?

It depends on the provider. There are many fly-by-night companies that targets unbanked Filipinos and get their money. SEC regularly releases a list of scammers to prevent Filipinos from getting victimized.

On the other hand, legit online cash loan providers must be registered with the SEC. It should have a physical address you can go to just in case as well as phone numbers you can call for any concerns.

What are the loan terms?

This will also depend on the lender. Typically, an online cash loan must be paid within 30 days with some lenders extending up to six months.

Payment on installment basis is also available wherein the amount will be divided into equal installments.

What about interest rate?

Since online cash loans are unsecured, expect interest rate to be higher. It could range between one and three percent, so make sure to check with your preferred loan provider.

How do I apply for an online cash loan?

The procedure varies per lender. Nonetheless, the procedure is almost the same:

• Go to your preferred lender’s website or download their mobile app.
• Apply online by filling our the needed information.
• Upload necessary documents for verification and credit checking.
• Wait for approval.
• Digitally sign the loan contract to proceed. The lender will also credit the loan amount upon submission of loan contract.

What are the usual payment options?

• Bank transfer
• Payment thru Bayad Center
• Remittance center like Cebuana and M Lhullier
• 7-11 via DragonPay

Make sure you check with your lender regarding payment terms.

What happens if I wasn’t able to pay my loan on time?

This could have a negative effect on your credit score. A loan is a loan, regardless of where you availed it. In case of default and inability to pay the loan despite demand, it will show up in your credit record where other financial entities have access to.

You might also be asked to pay penalty fee multiplied with the number of days you weren’t able to pay the loan.

Are you ready to borrow? You can also check this link for comparison of rates of online cash lenders in the Philippines.