Situations Where Personal Loans are Necessary

What is a Personal Loan?

A Personal Loan is a type of financing that allows people to pay for their personal needs and is typically repaid with interest and in monthly installments. Generally, banks, online lenders or non-bank financial companies offer personal loans. 

Here are common scenarios where personal loans are necessary for people to take:

Medical Emergencies

Medical emergencies are expensive, especially for people who do not have health insurance. The stress of coming up with the money for health-related emergencies can be too much because a large amount is needed in such a short period of time. Without savings, a person may need to apply for a personal loan. 

Purchase of a House or Car

Every person’s dream is to have their own car and house. People can save a lot when they no longer have to pay rent and owning a car will provide a much more comfortable means of transport. But since it requires a lot of money to purchase a car and a house, a personal loan is a great financing solution for people. 

Other Emergencies

That is the thing with emergencies – you’ll never know when they come. Scrambling for money is a struggle and with very limited sources of funding, applying for a personal loan is a reasonable option for many. 

Personal Loans Available in the Philippines

There are a lot of Personal Loans available in the Philippines. Still, these are the few companies that offer the best services for people who are looking at convenience and affordability:

Tala

Tala is a digital lending company that provides instant personal loans to users who have qualified and applied for a loan. Anyone with an Android phone can download the Tala app, create an account, answer some questions, provide information and submit their valid ID. Once approved, the borrower will have the option on their preferred method of receiving the funds. 

Citibank 

Citibank is one of the biggest international banks providing competitive financial products and services to Filipinos – personal loans included. They are also known to be the bank that offers the highest maximum loan amount to qualified borrowers. 

Bank of the Philippine Islands (BPI)

BPI offers one of the most ideal personal loans in the country in terms of the maximum loan amount a person can apply for. An unsecured multipurpose loan is offered to borrowers perfect for their loan purpose – for tuition fee payment, house renovation, additional capital for their business, or anything else they need. 

Loan Repayment Options

Those who have been approved for a personal loan have different repayment methods to choose from, depending on where they took a loan. Among the many options available are the following:

• Auto Debit Arrangement (ADA)
• Cash Deposits to Bank
• Over-the-Counter Deposit (Bank or Payment Centers)
• Online Transfers

Benefits of Personal Loans

It is easier to pay

When you have a good credit score, most companies lower the interest rates, and they give you more time to repay them so you can easily manage the repayment without hurting your budget. 

Convenience 

Most Personal loans don’t require you to submit too many documents anymore – they will only ask you for a valid ID to avail of a loan and proof of income. 

Your plans won’t get canceled

When you get short of funds for your financial goals in life, especially the important ones, you don’t need to cancel them. Instead, personal loans can help you fund your plans.

Cautions About Taking a Personal Loan

Taking a personal loan is an excellent choice for financing if a person has a clear plan of using the loan proceeds. It will be able to help someone build their credit score and provide the means to achieving financial freedom. 

However, if a person is only taking a personal loan to address things that are not urgent and will only lead to more debts, or if a person does not have a steady source of income or already has existing debt, applying for one may not be a good idea. 

Conclusion

It is now easy to have access to personal loans. Borrowers can choose various banks or online loans that are not complicated to apply with for personal loans. Some people view loans negatively but when the funds are used right, they can be a means to boost the financial well-being of a person. That being said, one must carefully choose the financing institution to help them turn their dreams into a reality. After all, a personal loan should be a means for financially uplifting someone and not be the start of their financial troubles.