According to the results of the recent annual Consumer Financial Survey (CFS) of the Banko Sentral ng Pilipinas (BSP), the Philippines remain a consumer-spending driven economy. In a way, the Filipinos themselves help…read more >>
The Most Common Loan
Filipinos avail for the most common loan— personal loan— for a variety of purposes and reasons; but it is worthy to mention that some intended loans were made with sound financial planning than others. While personal loans are popular, convenient, and are beneficial for both lender and borrower alike, it is important for borrowers not to get ahead of, or outdo themselves when taking out funds and finances.
The fact that lenders eventually disburse out money based on submitted qualifying requirements or, willing to offer a loan, especially when spending the loan is worth the interest that a borrower pays, it only meant that borrowers should ultimately reconsider and evaluate their intents whether or not it is prudent to avail on more debts. Below is the following list of the most common reasons Filipinos apply for a personal loan.
Debt Consolidation Loans
Borrowers surmise that removing unsecured debt through a traditional loan will lessen the interest charges they actively pay on their credit card debts. Consolidated loans incur lowerinterest rates and enable much easier repayments of the principal loan amount, since the payments are spread out over a longer time period with a predetermined monthly amortization.
Home Refurbishing/Improvement Loans
Prior to resorting to a personal loan, borrowers should consider taking out a home equity loan when borrowing funds for home refurbishing and improvements. It is advised that they could directly settle to avail for a personal loan, only when a home equity loan is not readily available to borrowers. While the terms and conditions of availing a personal loan may entail to be unappealing and much less beneficial than a home equity loan, the improvements done may somehow appreciate the value of the house, just enough to mollify the steeper interest rates.
Loans for Purchasing or Repairing a Vehicle
While it is wiser to avail for a traditional automobile loan, several borrowers find it more convenient to avail for a personal loan and avoid the hassles of transacting with an automobile financing outfit. However, availing for a personal loan entails the borrower to normally pay higher interest rates than a traditional automobile loan. Together with purchasing a vehicle, automobile repairs are other common reasons cited by borrowers in requesting a loan, and it is usually the most expedient procedure to finance repairing vehicles. But still, it is a lot more prudent to have an emergency fund from which to source funds.
Loans for Luxurious Needs
Borrowing to finance big expenses like vacations, weddings and high-end gadgets is also top priority on the Filipino’s list of reasons for applying personal loans. Generally, they are long desired and necessary expenses that just crop up and make borrowers unprepared, thus, pushing them to avail of personal loans