You need to pay for your child’s tuition, an existing debt, or throw a party to celebrate your first career milestone. But you’re short on funds or have none to begin with. Your priorities can be solved by taking a collateral loan.
How to get a collateral loan and where
A collateral loan grants a loan in exchange for the lendee’s assets or any property of value. If the loan cannot be repaid, the bank can seize the assets and sell them. Also known as a secured loan, the assets serve as the lender’s security and insurance in case the borrower defaults, or when the payments stop.
Collateral loan can be classified into three major types: personal, small business, and mortgage and auto loans. The collateral required by each type depends upon the nature of the loan. Physical property and monetary investments for the personal loan, real estate and inventory for small businesses, and the asset to be purchased by the borrower are the collateral needed by the banks.
If you don’t want to risk your assets, but still need a loan, you may take a non-collateral loan. Here are the advantages and disadvantages of not pledging collateral to the bank.
Advantages of a non-collateral loan
Also called an unsecured loan, a non-collateral loan lacks the security given by the assets. If you default, the bank will not take anything from you unless a court order is issued, reminding you to settle unpaid balances.
The only assurance the lender has that you will not default is your creditworthiness and ability to pay back the lender religiously. Unsecured loans allow you to focus more on paying rather than worrying about your possessions going to the bank for sale.
Disadvantages of a non-collateral loan
To compensate for the lack of safety net provided by collateral, non-collateral loans can have a higher interest rate. The lender only depends upon your word and your ability to pay them back.
If your business defaults, the bank won’t take anything away from it. Interest can spike if you miss payments or pay less than the mortgaged amount. The lender may even make your terms less favorable if you don’t repay them on time.
No collateral loans process
Present a valid government ID and credit documents to the lender. Since this type of loan does not have collateral, the lender and bank need to see your financial capacity. Examples of financial documents include income tax returns, proof of payment, most recent payslip, etc.
The process can take anywhere between a few hours to weeks, depending on the lender and the amount to be loaned.
How to Get Approved for No Collateral Loans
Fill out and provide all financial documents required by the lending company. Unlike traditional lending companies, Robocash does not require a personal appearance from the user to file or claim the loan. The paperwork can be emailed to them for a more convenient and hassle-free transaction.
Your financial standing is the most important aspect of a non-collateral loan. To qualify for a loan, your loan amount should fall under your salary range. You should also have a good credit standing with other banks to let the lender know that nothing will hold you back from paying back the loan.
Requirements for non-collateral loan
Robocash requires one government ID. You can also present the following documents to supplement the filing process: payslip, certificate of employment, income tax return, and company ID.
Payslip is required because it serves as your proof of stable income. Other documents that prove you have spending power include utility bills and recent credit card statements.
For self-employed individuals and business owners, you need to forward your Department of Industry certificate of registration and other relevant documents.
Robocash is not the only company with unsecured loans. The market is saturated with lending companies that offer non-collateral loans. But Robocash sets itself apart with its loan offerings.
|Lender||Interest rate||Loan tenure||Maximum loan amount||Income||Approval time|
|Robocash Payday Loans||1.65% per day||7 to 30 days||10,000 for first-time borrowers, and up to PhP 25,000 for repeat-borrowers||Depends on monthly gross income||In 24 hours|
|EastWest Bank||1.49% per month||Minimum of 12 months, maximum of 36 months||Minimum of PhP 25,000, maximum of PhP 2M||At least PhP 180,000 annual income||Three to five banking days|
|Welcome Finance Philippines||1.60 to 3% for 12, 24, and 36 months||Minimum of 12 months, maximum of 36 months||Minimum of PhP 20,000, maximum of PhP 500,000||At least PhP 180,000 annual income||Two to seven days|
|Cash Mart Philippines||From 0.8% to 3.5% per day Depends on loan terms.||Five weeks||Minimum of PhP 5,000, maximum of PhP 50,000||Stable source of income||As soon as the application is submitted online|
|Cashwagon Philippines||2% per day||Up to 180 days||Minimum of PhP 5,000, maximum of PhP 30,000||At least PhP 6,000 monthly income||One to two working days|
|24pera||1.28% per day.||Minimum of 61 days, maximum of 1 year||Minimum of PhP 2,500, maximum of PhP 15,000||Stable source of income||10 minutes|
Where is it better to take an unsecured loan
Robocash is the leading non-collateral lender in the Philippines. With a 4.98 rating on allthebestloans.com, it is the most trusted quick microloan company in the Philippines.
The company cares about its clients. Robocash is the only company that lowers the amount of the first loan so that its clients can repay it immediately. First-time borrowers can only borrow up to PhP 10,000 while “repeaters” can get as much as 25,000 on their next application.
Robocash cares so much that the amount can be deposited through any mode — at any time of the day. It is the ultimate convenience factor, always there in times of need.
Like other banks that offer personal loans, Eastwest Bank requires the borrower to have a monthly income of PhP 180,000. This is limiting for people who do not have a high monthly income.
On the other hand, Robocash does not require the borrower to have at least Php 180,000 minimum annual income. It just needs the borrower to be currently employed and present one valid government ID, for documentation purposes.
Robocash also beats Eastwest Bank in terms of convenience and speed. Robocash can deposit the amount through any way, while Eastwest requires the borrower to pick up the loan at its head office. Upon approval of the loan, the first takes only one working day, while the second in three to five banking days.
Welcome Finance Philippines
Similar to Eastwest Bank, Welcome Finance Philippines requires the borrower to have a monthly income of PhP 180,000. This could be a steep requirement for people who need money fast.
For Welcome Finance, it adds a 3% processing fee and a DST and notarial fee of PhP 400. These lessen the loan amount the borrower will get. Robocash does not have these fees, since it operates 24/7.
Unlike Welcome Finance, Robocash does not require the borrower to pay with post dated checks. You can pay using online banking or through the card of any bank to settle your Robocash monthlies.
Cash Mart Philippines
The minimum loan amount of Cash Mart can be insufficient for some people. Although it can be increased to PhP 30,000, the total amount can be whittled down by interest — up to 3.5%. This can be problematic for people who like to stretch their payment terms so that the amortization won’t be that painful.
With Robocash, the maximum interest rate is 1.6% per day. It’s easy to repay and do it all over again, since the interest rate is manageable.
There are multiple reasons for Robocash being the trusted non-collateral loan company by most people. It’s convenient, fast, and friendly for people who are exploring other financing options.
Other lending companies can be limiting in terms of payment and unexciting because of high interest rates and income requirements. Robocash seems to make things easy for its clients to pay back and do it all over again.