Top 10 Reasons Why Filipinos Get a Personal Loan

by Venus Zoleta, on category "Personal Loan"

January 23, 2019


Best Reasons to Get a Personal Loan | Moneymax

Although hard work and financial discipline pay off eventually, the amount of time that we need to save money for a certain financial goal weighs us down.

Just exactly when will you have the money to go on that much needed R&R, to buy her that diamond engagement ring, to enroll your child in school, or to pay for maternity bills? The list of questions goes on, and the answer is almost always uncertain.

Money plays a crucial role in every decision and every event in most people’s lives. However, unexpected events, such as hospitalization, instantly lead to an immediate need for an amount that you probably don’t have.

If you don’t want to delay your plans any further or when a situation requires money, a personal loan can give you financial flexibility.

Here are the 10 best reasons to get a personal loan that can positively impact your family and your well-being:

1. Education

Best Reasons to Get a Personal Loan - Education

Education is an important investment, whether it’s pursuing higher studies for your career advancement or funding your children’s college education to secure their future.

While education is a basic right in the Philippines, many families cannot afford it. If you want your child to get topnotch-quality education at a premier university, be prepared to spend more than a hundred thousand pesos every year.

Saving up for your child’s college tuition fund is something you can do many years ahead. But if you’re pressed for time to pay for tuition this year, consider getting a personal loan for education purposes with a low interest rate and fixed repayment term.

2. Medical Emergencies

Your emergency fund, health insurance, and PhilHealth membership should cover unplanned healthcare expenses like hospitalization. But then there are other related costs like medicines and post-surgery treatments you have to pay for when you get sick. If you’re an expecting parent, the costs of maternity care can also drain your budget.

These urgent expenses can’t wait. When you find yourself in a tight financial spot during and after an illness, a personal loan can help you pay for unexpected and critical expenses.

3. Appliances / Electronic Gadget

Best Reasons to Get a Personal Loan - Appliances or Electronic Gadgets

Buying the latest iPhone model when your current phone is still working isn’t one of the best reasons to get a personal loan. Rather, appliances and gadgets you’ll use to earn more money (like heavy-duty washing machines for your laundry business or a new laptop for your freelancing gig) are purchases that make getting a personal loan a smart choice.

4. Home Improvement / Repair

Sudden expenses like house repairs are common among Filipino households after going through a flood, fire, or any disaster. You may also need to expand your space at home for your growing family, build a gate or install security features for safety, or fix issues like a leaky roof.

For your home improvement or repair needs, a low-interest personal loan can help you meet and afford them.

5. Business

Best Reasons to Get a Personal Loan - Business

Starting or growing a business is one of the popular and best reasons to get a personal loan in the Philippines. The Bangko Sentral ng Pilipinas’ 2017 financial inclusion survey found that 31% of Filipino adults with outstanding loans used them for business, which is the second most common personal loan purpose in the Philippines.

You can’t wait forever to save enough capital to set up a business, so borrowing money from a bank or government office is your best bet. Being able to borrow money to cover your startup costs is an advantage you can enjoy from a business loan.

Read more: What is the Best Type of Loan for My Business?

6. Travel / Vacation

While traveling seems a luxury, it’s worth spending for because of its many benefits. It allows you to experience different cultures, expand your network, develop new skills, and strengthen your bond with family and friends.

Ideally, you should save for your travel expenses. But if a great travel opportunity comes along and you need money right away, a personal loan can help you avoid missing that out.

Read more: Should You Get a Personal Loan to Travel?

7. Vehicle Purchase

Getting an auto loan is a popular way to finance a car purchase in the Philippines. Instead of paying around a million pesos upfront, you just pay 20% to 50% of the total price, drive home your new vehicle, and pay for it in affordable monthly installments.

Read more:

8. Wedding

Best Reasons to Get a Personal Loan - Wedding

Weddings are an expensive affair in the Philippines. It isn’t uncommon for engaged couples to spend anywhere between half a million pesos to more than a million pesos just to get married.

Even if you go for a simple and intimate wedding, it can set you back around PHP 100,000 to PHP 200,000. It’s still a huge sum of money, especially if you’re funding your wedding without help from anyone.

A personal loan can ease the financial burden that comes with wedding preparations—as long as you keep your budget within a reasonable range.

9. Emergency Fund

Loss of income due to unemployment, illness, or calamity can pull your finances down—but not if you have an emergency fund. However, it does take a while to build your emergency fund, as it have to be equal to six months to a year’s worth of your living expenses. To adequately prepare for sudden expenses, it makes sense to get a low-interest personal loan.

Read more: 5 Steps to Build Your Emergency Fund

10. Balance Transfer / Debt Consolidation

You can use a personal loan to pay off your other outstanding loans. Through a debt consolidation loan, you can make your finances more manageable by rolling all your credit card balances and any other pre-existing debt into one big personal loan. It’s one of the best reasons to get a personal loan, as it allows you to refinance your old loans into one with more affordable terms.

Final Thoughts

These productive use of personal loans can help you achieve your financial goals and stay in control of your finances. With a personal loan from a reputable bank in the Philippines, you get a fixed repayment term and fixed interest rate, so budgeting every month is simple and seamless.

Applying for a personal loan is easy. If you’re employed or self-employed for at least two years with a minimum required income, you’re qualified. Before sending an application, make sure that you compare the best personal loans offered in the country.