Borrow money online

The Best Ways to Borrow Money

Ask any adult about borrowing money and you will learn that this is a fact of life. At one point in life, everyone needs to borrow money; it could be for building a new home, financing a college education, buying an asset, investing, or even meeting an urgent need. Regardless of the reason, you have several financing options. From banks to government agencies, online lending companies, credit cards, peer to peer (P2P) lending among others, you are spoilt with options as far as where to borrow money in the Philippines is concerned. In this article, we will explore the best ways to borrow money, highlighting the pros and cons of each option.

Banks

One frequently asked question by people looking to finance their needs is “where can I borrow money in the Philippines?” For most people especially those with bank accounts, this has been one of the options. They are described as the traditional source of money for most individuals. Banks normally take deposits and then distribute the money in form of credit such as loans and mortgages.

Now let’s look at the advantages and disadvantages of the bank as a means of borrowing money. 

Pros

• Banks are well-established sources of loans
• With a good relationship with the bank, it is easy to apply and get approved for a loan

Cons

• Interest rates and fees may be high when compared to other ways of borrowing money
• Banks will require security whether in form of collateral or regular income before advancing loans
• People with poor credit history may find it hard to get loans from the bank

Peer-to-peer (P2P) lending

Some refer to P2P lending as a form of social lending as individuals borrow or lend from each other. This happens directly without any intermediary. Since it removes the brokers in the process, it can be a convenient and cheaper way of borrowing money. With this method of borrowing, a borrower gets money from people who are willing to lend at an agreed interest rate. The two parties normally link up through online borrowing and lending platforms. Here, a borrower presents his or her case on the site and investors assess them in an attempt to determine whether they can extend a loan to the individual. Once convinced that they are worth it, they proceed with the lending process. In return, they expect to earn some interest out of the money that has advanced. It is an ideal way to borrow money online for financing projects or emergency spending.

Pros

• A borrow may get a loan even if they do not qualify in other sources
• Loan interests may be lower than in other sources
• One can get a loan from multiple lenders

Cons

• P2P lending platforms may have complex terms and conditions that one needs to read carefully
• Since it is possible to borrow from multiple lenders, one may get into a debt problem 

Credit cards

Most people do not know that when they use credit cards to purchase or pay for the services they are borrowing money. The issuer of a credit card is allowing you to spend money in advance and then repay later once it falls due. Some credit cards are issued in form of actual funds, where instead of using your balance to pay for goods or services, you withdraw cash. This is known as a cash advance.

Pros

• It is a relatively cheaper way of borrowing money since there are no application fees
• The cost of borrowing is also low since you are not charged interest on the loan

Cons 

• If the cash advance is carried over it can attract hefty charges 
• The amount that can be offered in terms of cash advance is relatively small making it hard for people in need of long-term financing or when in need of a large amount of money
• Your credit rating may be affected if you borrow frequently

Government loans

Government agencies are also a good source of loans. Though it may be hard to qualify for such as one must fulfill stringent requirements, the funds attract low interest and have a flexible repayment period.

Pros

• Available at friendly interest rates
• They come with a flexible repayment period 

Cons

• One has to meet stringent conditions 
• They are not available to all
• The application process can be lengthy and complicated

Online lending companies

For people with limited ways sources of funds, online borrowing money remains the most ideal option. Banks, credit unions, government agencies, and other mainstream lending institutions normally shun a certain category of borrowers. If you are unemployed, have no collateral and more important have no credit history or have a low rating, getting a loan from these institutions is next to impossible. However, all is not lost, as where the question of “where I can borrow money online” is now well covered. You only need to look for the best money borrowing website today and you are sorted. Talk of platforms such as DiGiDo, MoneyCat, Online Loans Pilipinas, and Kviku, UnaCash among others, if you are searching for a money lending “near me” with no credit history, you will land on one that can offer loans easily. 

Let’s look at the pros and cons of online lending companies.

Pros

• The application process is easy
• They do not need lots of documents
• Money is approved and disbursed easily 
• All the processes are done online, no need of visiting physical offices
• They do not need your credit history to decide on whether to approve or not

Cons

• Interest rates can at times be exorbitant
  
• Not ideal for those looking for a large amount over an extended period

Pawnshop loans

This is a type of loan where a borrower provides collateral such as a TV, and jewelry and is given a loan based on the appraised value of the item.

Pros

• Less documentation required
• It’s a quick way to borrow money

Cons 

• Collateral or security is required
• Interest rates are normally high.

Borrowers are presented with several options, one needs to select the best way to borrow based on their needs and circumstances. You should not despair when one lender denies you credit, you have a long list that you can choose from ranging from banks, credit unions, government agencies, online lenders, and peer-2-peer platforms among others. All you have to do is apply and if approved, follow the terms and conditions of the loan. With such, you will improve your credit rating; qualify for larger amounts and over an extended period.

FREQUENTLY ASKED QUESTIONS

1. How do I borrow money with bad credit?

If you have bad credit, you can still get a loan. You need to identify lenders who do not look into your credit history to approve a loan. Most online lending companies do not look into your credit history. However, given the risk, they may charge a high-interest rate and the amount advance may be relatively low. 

2. Who can borrow money from the Government?

To get a loan from government agencies, you need to meet some conditions. They include: being a person with a disability, aged, woman, youth, or any other category and you want some funding for your business or education. Only those who meet the set conditions can quality.

3. How much loan money can I get?

The amount you can get as a loan depends on several factors such as the lending institution, ability to repay, the credit history, collateral, and the type of credit you are seeking. However, most lenders can give up to 20,000 PHP as a short-term loan.