Published: February 19, 2020 | Updated: May 22, 2020 | Posted by: Venus Zoleta | Personal Loan
This article was published on April 19, 2018 and was updated on February 19, 2020.
Salary loans—with their quick online application, guaranteed approval with no credit checking, and fast cash loan disbursement—can help cash-strapped Filipinos meet their urgent financial needs. More so when it’s Petsa de Peligro and there’s an emergency, like sudden hospitalization in the family or overdue bills.
Before you shop around for options, make sure you’re well-informed about salary loans in the Philippines. Keep reading to know what these loans are and which ones you may consider for financial emergencies.
A salary loan is a type of loan borrowers can get to make ends meet or finance an important expense (e.g., tuition, medical bills, etc.) before receiving their next paycheck. Salary loans, whose amounts are usually based on the borrower’s gross monthly salary, are expected to be paid off over a fixed period.
Also called online loans or quick cash loans, salary loans are easier and faster to get than traditional loans. Simply apply and submit a few requirements online, and receive the money within 24 hours.
Unlike pawnshop loans that require collateral such as jewelry and gadgets, salary loans don’t require any collateral. Rather, most of them ask for only a valid ID and proof of income or billing.
Compared to personal loans and pawn loans, salary loans in the Philippines have higher interest rates, lower loanable amounts, and shorter repayment terms. However, it’s also important to note that salary loan providers offer lower rates and longer terms than loan sharks.
Many formal and informal lenders offer salary loans in the Philippines. Be warned, though: some lenders charge extremely high interest rates, making you pay almost double your loan amount.
To help you avoid loan sharks or predatory lenders, we’ve filtered the choices down to five of the best cash loans in the Philippines. These short-term loans have reasonable interest rates, fast approval and funding times, and positive customer feedback. They come from different legitimate sources such as the government, banks, or legitimate financial companies that are licensed by the Securities and Exchange Commission (SEC).
The most availed type of SSS loan, the SSS Salary Loan makes borrowing affordable for its members with its low annual interest rate of 10%. It’s also one of the salary loans in the Philippines with the longest repayment term of two years in 24 monthly installments.
Traditionally, SSS members apply for a salary loan at an SSS branch. Now, a salary loan application can be completed online through the My.SSS facility.
If you file your salary loan application online, you just have to create an online account through the My.SSS portal. No need to submit any documents because your SSS membership records are already verified through its online facility.
However, if you apply for a salary loan personally at an SSS branch, you should present two valid IDs and an accomplished member loan application form.
Tala is a California-based mobile tech company that provides financial access to underserved people worldwide. One of Forbes’ top 50 fintech companies, Tala currently operates in four developing countries, namely the Philippines, Kenya, Mexico, and Tanzania. Tala offers instant loans in the Philippines via a mobile app for loan applications, status tracking, and customer support.
Filipinos aged 18 and above with an Android smartphone and a Facebook account can apply for salary loans from Tala Philippines.
Receiving your salary through a Security Bank payroll account? You can apply for a Salary Advance Loan (SALAD) if your employer is an accredited company under this loan program.
Security Bank’s SALAD provides short-term financing to regular employees of SALAD-accredited employers. Once enrolled, a salary loan can be availed simply by texting. Within only 10 minutes after sending an SMS to Security Bank, loan proceeds are credited to the borrower’s payroll account.
To enroll in the loan program, employees need to submit an accomplished Credit Agreement Form and present two valid IDs. Once enrolled, no documents are required when applying for a salary loan from Security Bank.
Security Bank requires only a one-time enrollment for employees who wish to avail of the Salary Advance loan. Once enrolled, borrowers can simply send an SMS to the bank every time they need to get a salary loan.
Vidalia Lending Corp. is a peer-to-peer lending platform that has been providing personal loans, small business loans, and salary loans in the Philippines for more than 10 years. The Vidalia Salary Loan is one of the great options if you’re looking to borrow money from a legitimate private lender.
Cash Mart Philippines is owned by a leading Singaporean online lending company that has been providing quick cash loan services for almost 50 years. It’s SEC-registered with an office in Taguig City. The lender offers quick loan processing, approval, and disbursement of all its loan products, including the Cash Mart Salary Loan.
Here’s a table showing a quick comparison of the best salary loans in the Philippines:
|SSS Salary Loan||Tala Loan||Security Bank Salary Advance Loan||Vidalia Salary Loan||Cash Mart Loan|
|Loan Amount||Up to twice the average of the member’s 12 latest posted monthly salary credits||PHP 5,000 – PHP 30,000||PHP 20,000 – PHP 50,000||PHP 3,000 – PHP 30,000|
|Loan Term||24 months||4 days to 3 months||2 to 12 months (in weekly, bi-weekly, or monthly installments)|
|Interest Rate||10% per year||3.5% per month||6% per month||0.0571 % to 0.8% per day (APR: 20.8415% to 292%) depending on the loan term|
|Other Fees||One-time late fee: 8% of the total outstanding balance||Late payment charge: PHP 125||Processing fee: 5% of the loan amount||Processing fee: 10% of the loan amount|
|Approval Time||N/A||Less than 5 minutes||N/A||Within 1 to 2 days||Within 24 hours|
|Funding Time||After 3 working days since the loan application date||Within 1 business day||Within 10 minutes||2 to 5 days after the application date||Within 24 hours after approval|
Getting a salary loan should be the last resort—not the first option—when borrowing money in the Philippines. Never abuse them, too. Or else, you’ll stress yourself even more with your loan repayments.
Before you decide to apply for a quick cash loan, make sure you do it for the right reason and you’ve explored all other options. These quick cash loans are good only during an emergency or any unforeseen event when you’ve exhausted all means to find enough money. If you use them for your daily living expenses, you’ll just bury yourself in debt while paying very high interests.
Need money to buy a car, have your dream wedding or vacation, or start a business? Salary loans, with their extremely high interest rates and short loan terms, are the worst option. Instead, save money by getting a personal loan with a low interest rate (ranging from 1.20% to 1.94%) from a reputable bank. Compare personal loans in the Philippines here.
Salary loans are convenient, accessible, and useful when you’re in dire need of money. When getting one is your only option, make sure to compare different cash loans, check the fine print, use an online loan calculator, and pick the instant loan with the lowest interest rate for your chosen loan term.