Yes, there are legal online lending apps in the Philippines that offer loans without collateral. These loans are often referred to as unsecured loans. Here’s why they exist and things to consider:
- Type of loans: Unsecured loans, including those offered through online lending apps, rely on the borrower’s creditworthiness and promise to pay rather than physical collateral.
- Risk-based pricing: Since these loans are riskier for the lender, they typically have higher interest rates than secured loans.
- Eligibility: Online lending apps offering loans without collateral often have simpler application processes and may approve borrowers who would not qualify for traditional loans
- Legal framework: They must still be registered with the SEC and adhere to consumer protection laws like the Fair Debt Collection Practices Act and the Truth in Lending Act.
Examples of online lending apps in the Philippines offering loans without collateral:
- Finbro
- Pesoloan
- Cashalo
- Digido
Important Considerations:
- High interest rates: Be prepared for higher interest rates than with traditional secured loans. Carefully compare rates between different lenders.
- Shorter terms: Unsecured loans may have shorter repayment terms.
- Creditworthiness: Your credit score and income will significantly impact your eligibility and the interest rates you’ll be offered.
- Debt trap: Easy access to loans without collateral can lead to a cycle of debt if not managed responsibly.
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