What are Quick Cash Loans?

These are loans that disburse money fast. Quick cash loans are also non-collateral. And they have simple requirements.

But quick cash loans come with high interest rates. You also need to repay within a short period. Some would even charge an excessive processing fee. 

Quick cash loan application, approval, and cash disbursement are all done online. You can apply anytime, anywhere. 

Are Quick Cash Loans Legal in the Philippines?

Quick cash loan in the Philippines is legal if the lender complies with all the regulations set by the Bangko Sentral ng Pilipinas (BSP) and the Securities and Exchange Commission (SEC).

You can visit the BSP and SEC websites to verify the legality of a particular quick cash loan provider. Reading legitimate reviews will also help. 

To ensure that a lender has complied with all the requirements set by the government, you can ask for its SEC Registration Number and Certificate of Authority. Without such documents, it’s a red flag! 

How Quick Cash Loan Works?

Quick cash loans implement an easy application process. No need to present supporting documents. No credit score checking. Borrowers can receive the loan proceeds within 24 hours. 

Below is a typical flow of a quick cash loan application:

1. The borrower visits the lender’s website or installs its loan app. 
2. Filling out of application form. 
3. Submission of requirement/s. Quick cash loans usually require one valid ID. Upload a scanned copy of your ID on the website or app.
4. Wait for the decision.
5. If approved, you will immediately receive the money or within 24 hours using the agreed disbursement method.

Why Do People Apply for a Quick Cash Loan?

Quick cash loans apply high interest rates. But how come many Filipinos are still willing to take the risk? There may be a misconception. 

In this section, we will debunk some quick cash loan myths!

1. Emergencies- Many believe that quick cash loans can cover emergencies, including hospitalization, surgery, and buying all the prescribed medicines. Wrong! How can you pay for a hospital bill if you can only apply between ₱1,000- ₱3,000? Even if you’re a repeat borrower, the money you’ll get will not be enough to shoulder hospitalization costs.

2. Education- Some parents will also apply for a quick cash loan to pay their children’s tuition. Some even imagine the excess money is enough to buy notebooks, textbooks, and other educational materials. Another misconception!

3. Calamities- During typhoons, earthquakes, floods, and other disasters, applying for a quick cash loan is tempting. But then again, if you need funds to recover from any calamity, a fast cash loan can’t help you. It’s pretty obvious if you can only receive ₱3,000.

4. Job Loss- Sudden job termination will cause trouble for your family. Especially so that 44% to 50% of Filipino adults remain unbanked in 2022 alone. If you don’t have a job and don’t have savings, how can your family survive? So, you’ll consider applying for a quick cash loan. Not a good decision. Instead of applying for a quick cash loan, which only adds to your burden, why not look for a new job ASAP?

Quick Cash Loans: Expectation Vs. Reality (The Real Score)

Let’s get straight: You can only receive about ₱1,000- ₱3,000 in your first quick cash loan. The proceeds can’t cover emergencies, education, job loss, and other critical situations requiring more funds.   

With good paying habits, the loan amount may increase. However, it can’t still match the amount you’ll receive if you apply for long-term bank loans.

Before applying for a quick cash loan, you must be well-informed. Don’t worry; we will help you make an informed decision. We will share the HONEST reasons why a Filipino should apply for a quick cash loan.

1. Baby Supplies- If you need immediate money to buy your little one’s milk, diapers, wipes, and soap, apply for a quick cash loan. If you’re a first borrower, you can receive around ₱1,000-₱3,000, which is enough to buy baby essentials.  

2. Immediate Needs- Considering the low minimum salary in the Philippines, it’s possible that you will run out of supplies before the next payout. In this scenario, you can apply for a quick cash loan. You can use the money to buy rice, canned goods, noodles, soap, shampoo, and the like.

3. Contribution- Quick cash loans are also helpful if there is a sudden monetary contribution. If you don’t have cash ready, pick up your phone and apply for a quick cash loan. 

4. Dress Code- Family or office events may require a particular dress code. If the specified dress is not in your closet, quick cash loans can help. You can apply for as low as ₱1,000 to buy the required getup. 

5. Utility Bills- Electricity and water are essential to every household. But what if your income could no longer shoulder water and electricity bills? Maybe it’s the right time to apply for a quick cash loan. Just ensure the bills are not too high since quick cash loans only offer minimal amounts. 

6. Rental- Despite how hardworking Filipinos are, their earnings are still insufficient. Of course, ordinary Filipinos will prioritize essential items, such as rice, fish, and vegetables. How about the house or room rental? They are neglected. But don’t worry; you can rely on quick cash loans to shoulder rental fees.  

Advantages of Quick Cash Loans

1. Fast Disbursement- A quick cash loan will give you money within 24 hours. This is a perfect option in situations requiring immediate, minimal cash.

2. Minimal Requirement- Most quick cash loans only require one valid ID. There is no need to present a collateral. And your credit score will not be checked.

3. Easy Process-  Quick cash loan applications are 100% done online. The process is very simple. First, look for a reputable quick cash loan company and visit its site/ download its app. Fill out the application form. Then, submit the requirements. Wait for a few minutes. If approved, you will immediately receive the money. 

4. 0% interest- Some quick cash loan companies offer 0% interest rate to first-time borrowers. However, this offer has a short repayment term- usually up to ten days. You must pay on time; otherwise, the 0% interest will not apply. 

5. 24/7- You can avail of a quick cash loan anytime in the comfort of your home. 

6. Digital- As long as you have a smartphone, laptop, and internet connection, you can apply for a quick cash loan. You no longer need to go to a lending office to complete the process. 

Disadvantages of Quick Cash Loans

1. High interest rates- Quick cash loans charge high interest rates. While it’s true that some lending companies offer a 0% interest rate for new borrowers, this is subject to a shorter repayment term. If you fail to pay on time, the 0% interest offer will be forfeited. 

2. Short repayment terms- One of the disadvantages of quick cash loans is the short repayment term. You should repay within a week or less than a month. Failure to do so will lead to penalties. The longer you can’t repay your loan, the bigger the amount you need to pay. 

3. High Processing Fee- You’ll also shoulder a high processing fee in quick cash loans. A few lending companies may not ask for a processing fee, but the high interest rate will still hurt you. 

4. Minimal loan amount- Don’t apply for a quick cash loan if you need a large amount of money for emergencies. Fast cash loans can only provide a minimal amount, typically between ₱1,000-₱3,000. For minor financial constraints, quick cash loans can help. For major ones? Definitely not!

5. Vague information- Some lending companies do not transparently reflect the loan terms and conditions. They do this to entice more people to get into their trap.

6. Hidden Fees- Some lending companies also charge hidden fees. You’ll notice these fees after receiving the loan proceeds. If you think it’s unfair, yes, it is. But would you complain if the money is already in your hands?

Are Quick Cash Loan Apps and Websites Safe?

Applying for quick cash loans on websites is safer than on apps. Website applications will not require software installation. Therefore, there is no way that lending companies can access your personal information. 

On the other hand, applying for a quick cash loan through an app entails a serious security concern. Remember that part of the installation process is granting the loan app access to the information on your device. 

Lending companies will employ harsh collection tactics when you fail to pay your loans. This includes nuisance calls targeting people from your contact list. How did lending companies get a copy of your contact list? Simply from the loan app that you installed. 

Quick Cash Loan Issues 

Filipinos needing immediate and small amounts of money can resort to quick cash loans. But amidst the popularity of this loan product, some issues were also noted. 

Below are some significant issues you must know before applying for a quick cash loan. 

• Harassment- Profane words, calls in the wee hours, public shame, even death threats- expect these if you can’t pay a quick cash loan. Although the government had already toned down these coercive loan collection tactics, a few lending companies still resort to these.  

• Legality- Without proper research, you might fall into the trap of illegal quick cash loan providers. Illegal quick cash loan providers are not BSP and SEC-registered. You can easily spot dubious lending companies based on their transparency in reflecting loan details. 

• Privacy- Your personal information may leak if you apply for a quick cash loan. Why? Because the moment you install a loan app, you also allow a lending company to access your personal information.

• Predatory lending- Quick cash lending companies charge high interest rates, ask for excessive processing fees, and only provide short-term repayment options. If not for immediate needs, it’s not logical to apply for a quick cash loan. 

What is a Credit Score

Credit score is used to predict one’s credit behavior. The score that you’ll get will depend on your credit report. Some information that will be checked includes your repayment history, debt level, and number of accounts.

The higher your credit score, the higher your chance of being approved for a loan. You’ll also get better loan offers if you have a good credit score. 

Quick Cash Loans and Credit Score 

One of the reasons why quick cash loans are popular in the Philippines is that they don’t check credit scores. With this, even people with bad credit scores can apply and be approved for a quick cash loan. 

Lending companies offering quick cash loans are up for quantity rather than quality- so to speak. The goal is to receive and approve as many applications as possible. 

How to Establish a Good Credit Score

There are several ways to boost your credit score, but the bottom line is good paying habits. 

Credit score is crucial because banks use it as the basis for your eligibility to apply for a loan. If you have a low credit score, it means you have bad paying habits. And no banks will take a risk lending money to irresponsible borrowers. Remember that. 

Now, if you are a regular employee, it will be easier for you to establish a good credit score. All you have to do is visit a bank and apply for a particular loan. Since you have a stable income, it means you can pay your obligations within the given period. Thus, the bank will approve your loan. 

When you fully pay your loan, it will further increase your credit score. If you want to loan again, the process will be much easier. Why? Because you’ve proven yourself to be a good payer, and your high credit score speaks for it.

On the other hand, Filipinos who can barely meet both ends will really have a hard time establishing a good credit score. First and foremost, without a reliable source of income, no bank will dare to lend them money. 

No matter how ordinary Filipinos promise to pay their obligations on time, without a good credit score, banks will not consider them. Again, banks only believe in credit scores. This is why typical Filipinos don’t have good credit scores and can’t apply for bank loans. As a result, they resort to quick cash loans with easier requirements and will not look for credit scores. 

GCash and Maya are the two leading digital payment platforms in the country now providing quick cash loans to Filipinos.

Since GCash and Maya’s quick cash loans will not ask for credit scores, they are a huge hit for ordinary Filipinos. So, if banks can’t approve your loan to start a small business, apply for a quick cash loan in GCash or Maya. 

GCash’s quick cash loan offers include GLoan, GCredit, GGives, and Sakto Loan. Meanwhile, Maya offers Maya Credit to pre-qualified users who need immediate cash.

Take note that GCash and Maya’s quick cash loans are pre-qualified. Meaning, only users who reach a specific parameter will be eligible to apply. 

GCash uses GScore to determine who is qualified for a quick cash loan. Meanwhile, Maya Credit is only available to active Maya users.

Nowadays, many Filipinos are actively using GCash and Maya. This means applying for their respective quick cash loans is a lot easier. 

Are you aware that you can use GCash quick cash loans as a stepping stone to apply for bank loans? Yes! Definitely, it’s not a hoax!

GCash has partnered with Fuse Lending, CIMB Bank, Uno Digital Bank, BPI, and Maybank to expand its loan services. And what’s the implication of this? It means that the said reputable financial institutions will now honor GScore as the basis for one’s creditworthiness. You read it right. You no longer need a credit score but only a high GScore to apply for a formal and long-term bank loan. 

So, if you have a high GScore, use it in applying for personal, housing, car, and other long-term loans offered by the said GCash partner banks.

Now, what about Maya users? Can they start with Maya Credit and avail of regular bank loans later? The answer is a big YES!

Maya operates under Maya Bank – which is a legit, BSP-supervised banking institution in the Philippines. Therefore, if you have a good credit history on the platform, it’s also possible that you can apply for a larger amount courtesy of Maya Bank’s loan products. 

Conclusion:

Quick cash loans provide a minimal amount of money to cover minor financial constraints. But during emergencies, quick cash loans can’t help you. If you insist, you’ll be the next victim of too good to be true promises!