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Payday loans for August 2022 in the Philippines

Apply for a payday loan from companies verified by our specialists. On 20.08.2022 you have access to 4 loans with the rate starting from 0% per day. Increase your chances of getting money — fill out a multi-application with a free credit rating check.

Offers: 4

Updated:
02.08.2022
12:51
Online Loans Pilipinas
Online Loans Pilipinas
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300
650
1000
up to ₱20.000
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0,01% - 1% per day
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7 - 30 days
DIGIDO
Instant online loans
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300
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1000 - 25000
Rate
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Effective interest rate on the product

11,9% per month
Term
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Loan term for the financial product

3 - 6 months
Kviku
Kviku Online Loan
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300
650
1000
500 - 25000
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Effective interest rate on the product

up to 0.16% per day
Term
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Loan term for the financial product

60 - 180 days
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MoneyCat
Instant cash loans
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300
650
1000
500 - 20000
Rate
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Effective interest rate on the product

11,9% per month
Term
i

Loan term for the financial product

3 - 6 months

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Interest rates on payday loans in the Philippines 

According to the guidelines for Bangko Sentral ng Pilipinas Circular No. 1133, Series of 2021, on the ceiling/s of interest rates and other fees charged by lending companies, financing companies, and their online lending platforms, the maximum nominal interest rate for unsecured loans is 6% per month (0,2% per day), and the maximum effective interest rate is 15% per month (0,5% per day). The caps apply to unsecured loans of no more than ₱10000 and payable within four months.

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Payday loans for August 2022

Payday loans are also called check advance loans or cash advance loans. These are not identical to a personal loan and are intended to help you meet your most immediate financial needs. However, they may cause more harm than good, owing to their high-interest rates if you don’t pay them back on time. The percentage for short-term payday loan interest rates is dictated by the requirement, duration, and some state-level restrictions. The average interest rate offered by lenders for most payday loans in the Philippines reaches three figures, and even four figures in some cases annually.

However, loan borrowers have no choice but to borrow money from a payday lender despite the risks as that is their only choice for a fast cash advance in desperate financial situations. It is important to gauge all the risks and prepare yourself before you apply for a payday loan, along with all the things to consider.

What are payday loans?

Payday loans are types of short term loans in which online lenders offer credit with high-interest rates. Payday loans work based on your income, and the principal is generally a part of your next paycheck.

Payday lending is unsecured cash advances for small sums of money (generally less than ₱30,000) with very high interest rates and short-term repayment terms. A typical payday loan is ₱15,000, which the borrower may need to pay for such essentials as rent, utilities, food, or a medical bill. Loans, despite the name, are typically tied to a borrower’s salary, but lenders may still give loans when they know the borrower will have access to repayment cash soon.

What are the major types of payday loans?

Payday loans do not have any specific types, and it is just about getting small sums of money for purposes like:

  • Medications emergencies. Health problems always strike at the wrong time, difficult to prepare for. If you don’t have enough savings, you can finance medical treatment with payday loans, which could be used to pay for expensive medication or nurse’s care.

  • Personal reasons. Payday loans can be a good option if you have temporary financial difficulties paying your bills. The main thing is to make it a habit not to do this every month.

  • Extra wedding expenses. A wedding is one of life’s most important events. It is also one of the most expensive, which means additional costs may be set at the least expected time - you can borrow money for the banquet, food, wedding clothes, and honeymoon.

  • School fees. Because education costs a lot of money, not all families can afford to send their children to a good school. You may be able to get that extra cash to get back to school with an education loan.

  • Home improvements and renovations. You may be improving your quality of living, or maybe you were renovating your home, and you ran out of cash. You can still make the improvements and remodel your home with a payday loan.

  • Debt consolidation. You can consolidate your debt using a payday loan as debt consolidation or coupling is one of Filipinos’ most popular credit purposes.

  • Appliance purchases. You can get a loan to purchase the appliances you’ve always wanted: a refrigerator, air conditioner, or tablet.

How to apply for a payday loan

Payday lenders require borrowers to fill out a registration form which could be done at a payday lender’s office or online. Means of identification, a recent pay stub, and a bank account number are some of the many documents needed for payday borrowers.

Loan amounts can vary from ₱1,000 to ₱30,000, depending on the payday loan lender. If the application is approved, the cash is received on the spot, or it can be deposited to payday loan borrowers’ accounts within one or two days.

It is different from a personal loan because once the loan is credited, the full payment is always due on the borrower’s next payday. This is typically two to four weeks from the day the loan was obtained.

Payday loans work only when the borrower either presents a post-dated personal check that must coincide with their next paycheck or allows the lender to automatically withdraw the money from their bank account through an auto-debit instruction.

Payday lenders usually charge interest of ₱150 to ₱200 for every ₱1,000 borrowed. The opted Bank or Credit Union always calculates the interest rate on the APR basis of an APR for other credit products like mortgages, credit cards, personal loans, auto loans, etc. The surprising reason people avoid payday loans is that their APR ranges from 300% to more than 500%, which is very high.

Steps to apply through a payday loan company’s website

To apply for a payday loan, the borrower must follow the lender’s guidelines. The general steps involved in applying for a payday loan are given below:

  1. Visit the company’s website.

  2. Navigate to Apply for a loan, or you might have to navigate to the company’s payday loan page and click on Apply now.

  3. Create an account with the company by providing your email address and choosing a password.

  4. Provide your personal details (like your name, address, date of birth, personal identification, etc.).

  5. Select if it is a first loan or a second loan.

  6. Select the amount you want to borrow. Then enter your payment terms and your monthly gross income.

  7. Provide your employment details, including your employer’s name, address, and phone number.

  8. Then, upload the necessary documents like your pay stub, income statement, etc.

  9. Provide your account details.

  10. Click on Submit to complete your application.

You will instantly get your cash advance in your account if your application is approved.

Steps to apply through a payday loan company’s app

Many credit unions offer users a dedicated application that they can use to apply for a loan and track all their transactions and repayment information. The process may differ depending on the lender you choose, but the general process is given below:

  1. Download the company’s app from App Store, App Gallery, or Google Play.

  2. Create an account with the company by providing your email address and choosing a password.

  3. Navigate to the payday loan section and click on Apply for a loan.

  4. Provide your personal details (like your name, address, date of birth, personal identification, etc.).

  5. Select if it is a first loan or a second loan.

  6. Select the amount you want to borrow. Then enter your payment terms and your monthly gross income.

  7. Provide your employment details, including your employer’s name, address, and phone number.

  8. Then, upload the necessary documents like your pay stub, income statement, etc.

  9. Provide your account details.

  10. Click on Submit to complete your application.

You will instantly get your cash advance in your account if your application is approved.

Steps for in-branch loan application

This is a better way to apply for a payday loan, though it comes with inconveniences like waiting in a long queue. You have to physically visit the payday lender’s company branch and meet a customer service representative. Tell them your purpose of visit, and then follow their instructions to apply for a payday loan.

What are the main requirements for getting a payday loan?

To be qualified for a loan, there are some requirements you must meet. Please, note that the final requirements depend on the company you select. However, the general conditions are:

  • You must be a Filipino resident.

  • When the loan matures, you must be at least 21 years old and not more than 70 years old.

  • You must be an employed individual with a good credit report.

  • You must be actively employed with a minimum gross income per month (the criteria varies based on the lender you choose)

How to repay a payday loan debt?

According to the Consumer Financial Protection Bureau, before obtaining a payday loan, you must either provide a personal check to the lender or fill out an ACH (Automated Clearing House) form. This gives the company authorization to electronically withdraw money from your bank, credit union, or prepaid card account. Please carefully read your loan documents to know exactly how the repayment works.

Even though you are generally required to provide a repayment check before obtaining a loan, some payday lenders allow consumers to make their repayment physically when the loan is due. Some payday lenders also allow borrowers to redeem the check with a lump sum payment at the due date.

Furthermore, some companies also facilitate borrowers with an option to extend their loan in exchange for a hefty penalty. The borrower has to visit the loan company before or after the due date and opt for the rollover option. This is similar to re-borrowing when they are unable to make the repayment. This can only be used if the Consumer Financial Protection Bureau does not bar the borrower from applying for loans via a cooling-off period.

Please, note that if you want to opt for a rollover, it is important that you visit the bank before the due date. Otherwise, if you do not return to your lender, they will be forced to deposit the check or withdraw money from your account electronically.

This is important because if you have taken out a payday loan, you have likely agreed to its terms and conditions. This means you provided the lender with an ACH authorization for them to electronically access your checking account for repayment on loan due date.

What happens if one can not repay a payday loan?

If a borrower cannot repay the loan by the due date, they can ask the payday lending company to roll over their loan. The borrower must pay whatever expected fees, and the loan will be extended. But then the interest grows, and so do its finance charges.

For instance, let us say the average payday loan is ₱3,750. Using the lowest finance charge that is available (₱150 per ₱1,000 borrowed), the customer owes a finance charge of ₱560.25, which increases the total loan amount to ₱4,310.25.

If they chose to roll over the payday loan, the new amount would now be ₱4,950.94. The amount borrowed was ₱4,310.25, plus a finance charge of ₱640.69 (for the upcoming tenure). This makes the total due amount ₱4,950.94. That is how a ₱3,750 loan becomes nearly ₱5,000 in a month.

Apart from that, if the borrower defaults on the loan payment for a continuous period, the lender is authorized by the Consumer Financial Protection Bureau to take legal actions against them. This means that if the borrower does not pay the money back, they might end up behind bars in the worst-case scenario.

Pros and cons of a payday loan

Payday loans are some of the most used short-term lending products in the country. Many people occasionally depend on payday loans to meet their urgent requirements. Regarding the loans, the Federal Trade Commission and the Consumer Financial Protection Bureau, which are government regulatory bodies focused on preventing fraudulent, deceptive, and unfair business practices, try to regulate them by advising potential borrowers.

They urge borrowers always to try to find an alternative first. But If they must use a loan, they should try to limit the amount. They should borrow only as much as they can afford to pay with their next paycheck and still have enough to make it to the next payday.

However, it is important to gauge all the pros and cons to help you further decide if you want to go on and get a payday loan or not.

Pros

They’re very easy to access. The number-one advantage of payday loans is that they’re very easy to access. Many cash payday lenders promise access to cash within 24 hours and an immediate lending decision. Some are available 24 hours a day and seven days a week and have online apps. Unlike traditional loans, which can take time to apply for and get your money and all, these loan apps can take as little as five minutes.

They have few requirements. Unlike traditional personal loans, most payday lenders offer or have fewer requirements to apply. While having fewer requirements means getting cash is more convenient, you have to remember that the additional requirements from banks and other lenders are often put in place to help protect you.

They do not check your credit. Unlike traditional loans, where one needs a good credit score to be approved, payday loans don’t require a credit history. But then, since they don’t pull your credit, that means there is no hard credit inquiry, which can lower your credit score by some points. Well, except in very rare cases, however, they won’t help build for you the credit you need to move onto higher quality financial products in the future.

They are unsecured. Payday loans are not secured by personal property compared to mainstream bank loans, which means that if you default (that is if you don’t pay), the payday lender can’t seize your property as a consequence. But while it is not secured, payday lenders often have access to your bank account as part of the terms and conditions of the loan, which is a different type of risk on its own. They can also take many other measures, like sending your debt to collections or taking you to court over outstanding balances.

Cons

These loans are expensive. Payday loan interest rates are very that. They average about 400%. In comparison, many national banks offer personal loans charge which are about 1%-36% interest, while credit card interest ranges from about 10-30%.

They are considered predatory. A predatory loan has unfair, misleading and unaffordable terms and can potentially trap users in a cycle of debt. Payday loans are viewed as predatory because of their high costs that can quickly escalate.

Payday lenders don’t check your ability to repay. The payday lender doesn’t check whether you will be able to repay your loan. If you cannot repay, you could be forced to roll it over repeatedly, accumulating new fees each time.

They don’t increase your credit score. Payday loans do not help you build credit. Many lenders do not even send your report to the credit bureau. This could be a good warning sign if the loan provider does not report to any credit bureaus. Suppose you’re not sure whether or not the loan details have been sent to the credit bureaus, you should always ask the lender to share an acknowledgment and ensure the submission of your credit details.

You could get trapped in a debt cycle. Each time you roll over a loan, a payday lender charges additional fees, which increases your out-of-pocket costs for borrowing the money. Rolling the payday loans over increases significantly the amount of time it will take to repay the loan, sometimes adding months or even years to the original two week or a month terms. It is a debt trap.

Lenders can access your bank account. To gain payday loans, borrowers must often grant the loan lender access to their bank account. While setting up direct deposit to make bills and loan payments is somehow common now, this account access works differently. When you receive the loan, many payday lenders require you to write a post-dated check – in this case, a check to be cashed after your next payday. This could be risky if your bank charges you an excess overdraft or bounced cheque fees (also known as insufficient funds) in addition to the lender’s returned or failed payment fees. If you find yourself in this situation, contact your bank immediately to discuss your options for protecting your account.

Lenders can sue you. Suppose you don’t pay them back on time. In that case, payday loan companies can take you to court and seek a judgment against you for failure to repay a debt, and if a judgment is entered, you could be subject to garnishment, prison time, or other repercussions. Remember, however, that legal battles can be expensive, and in the case of small loans, the lender may find it unwise to sue. Some companies or debt collection agencies may threaten to sue or levy wage garnishments to scare you into paying them back quickly. If you receive these threats, you should seek counseling from a debt relief organization, an accredited financial counselor, or a certified credit counselor.

Legal regulation of payday loans in the Philippines

There is no interest rate cap on payday loans in the Philippines. However, the Securities and Exchange Commission (SEC) has recently decided to cap interests and other fees on consumers to combat predatory lending.

The SEC asked the Bangko Sentral ng Pilipinas (BSP) to set a maximum interest rate or interest rate caps in a statement in October 2021 after reports that some companies had added 2.5% to other fees. These institutions permit payday lending companies and are free to make loans at amounts, rates, and charges as agreed with borrowers under Section 7 of Republic Act no.9474, or the Lending Company Regulation Act.

The Monetary Board can also set the maximum rate or range of purchase discounts, lease rentals, fees, services, and other fees of financing companies under Section 5 of the Financing Company Act (Republic Act No. 8556, the “Financing Company Act”). Besides, Google Play blocks mobile lending apps that impose annual percentage rates of 36% or higher.

The real cost of a payday loan

Since it is a short-term loan, some provinces have laws limiting payday loans to a certain amount of money only within a specific period, e.g., ₱3,000 to ₱30,000, with no bounced check fee or finance charges.

The average payday loan’s annual percentage rate is between 390% and 780%, and the finance charge can run up to ₱200 or ₱300 if you need the money.

For example, if you wanted to borrow ₱1000, you’d be paying a 490% interest rate charged annually.

Let’s say your repayment is in 30 days. This will make the monthly interest rate 40.83%. With that in mind, this will entitle you to pay ₱13.6 per day as interest: (1000 x 40.83%= 408.3/30 = ₱13.6). Apart from that, you will also pay an additional ₱200 as a processing charge. This means the total amount you will be paying to apply for a ₱1000 loan will be ₱1608.3: (₱1000+ ₱408.3 + ₱200 = ₱1608.3).

Conclusion

Payday loan services are unsecured personal loans that have very high-interest rates. Furthermore, lenders often do not take into account the borrower’s ability to repay and have hidden fees that can cause financial problems for borrowers. So, if you’re considering taking out a payday loan, think about using safer personal loan options first as you could run into too much debt with the former. However, if you cannot opt for any other loan and your only option is to go with a payday loan, always gauge all the options available from multiple lenders and choose the best one.