Top Reasons Why Filipinos Apply For Personal Loans

As an alternative to payday loans, personal loans may be used for everything from paying off high-interest credit card debt on your bank account and avoiding a bad credit report or finally installing that swimming pool your family has always wanted. However, your motivations are unique to you because of their personal nature.

Since credit history standards and credit scores are not too high, personal loans may be obtained for a wide variety of reasons. Refinancing debt consolidation loan is a popular way to save costs for many consumers.

Some people only consider getting a personal loan when they need one, while others find that getting an unsecured personal loan with a set monthly payment is the most convenient and stress-free option to cover a costly outlay.

Meanwhile, in the Philippines, it's also a common practice to take out a personal loan for a wide variety of reasons. And as long as you're responsible for your payments, you're free to do anything you choose with the money. Let us fill you in on the most common reasons in borrowing money in the Philippines that have evolved throughout the years.

Top Loan Purposes in PH

If you want to avoid falling into serious debt, you should only apply for loans that will help you with sensible, practical, required, and urgent needs. The following are some of the most compelling arguments for securing a private loan, and how doing so may benefit both you and your loved ones.

1. Business

In the Philippines, taking out a personal loan to start or grow a company is a popular and smart financial move.

Since it would take an inordinate amount of time to build up enough money to launch a business, it is usually necessary to get a loan from a financial institution or government agency. A business loan has the benefit of allowing you to borrow funds for the purpose of covering your organization's initial setup expenditures.

2. Education

There is enough time to save up a little bit every year to pay for your child's college education if you will start early. However, if you're short on time this year and still need to pay for school, you may want to look into getting secured loans for education.

There are many Filipino households who cannot afford to send their children to school despite the fact that access to education is a fundamental principle. In fact, one needs to have a budget of about Php 100, 000 pesos yearly if they want their kids to attend a top-tier university. On the other hand, you may need as much as Php 300, 000 for one semester if your kid is pursuing a medical career.

Investing in one's education is crucial, whether one is looking to have a better edge in getting a job via further study or provide financial security for their kids through higher education. This is the reason why most personal loans of Filipinos evolve for education purposes.

3. Home Office Setup

The pandemic era taught us that having a dedicated space for a home office is essential and this means that you need a specific budget to build one. Many Filipino employees like the flexibility that comes with working from home. Workers who perform their jobs from home may want to consider upgrading their workspace as more companies go in this direction.

A new laptop or desktop computer, ideally one with at least 4GB of RAM, is one worthy investment that may be funded when you get a personal loan. In addition, you may want to upgrade your internet connection to at least 10Mbps through a postpaid plan or get a more spacious and sturdy work table.

4. Appliances / Electronic Gadget

Getting a personal loan so you may upgrade to the newest iPhone model when your existing phone still functions adequately is not a good idea.

Rather, when you borrow money, it is a good idea when you plan to utilize it to buy equipment and gadgets that will help you generate more money like a new heavy-duty washing machine for your laundry business or a new laptop for your freelance work.

5. Home Improvement / Repair

After a natural calamity, such as a flood, fire, or earthquake, many Filipino families face unexpected costs, such as home repairs.

At the same time, the expansion of living quarters to accommodate a growing family, the installation of safety and security systems, and the repair of problems like a leaking roof are other examples of necessary home improvements.

6. Vehicle Purchase

Auto loans are a common method of financing the purchase of a vehicle in the Philippines. You may take home your new ride now with a down payment of only 20% to 50% of the entire price and make manageable monthly payments instead of shelling out a million pesos or more all at once.

7. Emergency Fund

During the event of unforeseen situations such as loss of income due to unemployment, illness, or a natural catastrophe, having an emergency fund may save you from falling into financial ruin.

However, an emergency fund of six months' to a year's worth of living costs takes time to accumulate. In this case, obtaining a personal loan at a low-interest rate is a sensible way to be financially prepared for unexpected costs.

8. Travel / Vacation

It's a no-brianer. If you want to go on a vacation, you should save up for it. However, in the event that you unexpectedly find yourself in need of more finances, a personal loan may assist you avoid missing out on a once-in-a-lifetime vacation opportunity.

A trip may seem like a frivolous expense, but it's really very worthwhile. By any chance, it's a great way to broaden your horizons, get professional contacts, learn something new, and reconnect with loved ones back home.

9. Wedding

In the Philippines, weddings constitute a major financial commitment for the couple. As a matter of fact, it is pretty common to see engaged couples spend around Php 500, 000 to Php 1 million on their wedding.

At times like this, if you can keep your wedding costs under control, a personal loan might be a great way to help with the stress of planning your big day.

Get a Personal Loan Work for You through Home Investment

You can now get your personal loans work for you by getting a home investment!

Borrowing money to purchase an affordable house and lot for sale is a good way to get a low-risk investment for you and your family's future without placing undue strain on your finances or having debt consolidation loans.

You can turn this house and lot in the Philippines into a vacation home that you can rent out to travelers and tourists and earn extra income from it. Another option is to rent it out as an apartment and get a monthly passive income that can help you settle your mortgage and personal loan interest rates.

Just make sure to get a secured loan or personal loan funds to buy an affordable house and lot to avoid any problems in the future.

Lumina Homes is offering a wide range of great home investment options to every Filipino with its over 50 economic home segment projects available all over the country. These home units can be paid through bank financing or in-house financing depending on your budget and lifestyle.

With Lumina Homes, you can prevent the hassle of getting an unsecured loan since there will be an admin officer that will assist you all throughout your homebuying journey and in choosing the best flexible payment scheme for you.

Make sure to choose the best reason to save money and get a low-risk bank housing loan for a Lumina Homes investment!