Most Filipinos sometimes do not have enough savings in their bank account for emergencies. We are familiar with “utang” or budget cut loan however, normal personal loans from private lenders or bank sometimes take a long time to be approved, it can take hours, days, and in unlucky, it may take months. So, what is the best option if ever one needed money in an urgent emergency? What if you have to rebuild and repair your house or car due to flooding or disaster? Next, familiarize yourself with the power of an emergency loan.
What is an emergency loan?
A emergency loan (also known as cash advance) is a short-term unsecured personal loan that you can borrow instantly for an emergency expense. In the Philippines, individuals can primarily apply for emergency financing from private lenders, government agencies, and employers.
Unlike a normal personal mortgage, emergency loans often have shorter-term payment options and higher interest rates and fees. This is because the bank or other lending services know that you may not have many options other than accepting the deal.
SSS emergency loan
One of the most well-known emergency loans in the Philippines is offered by the SSS or the Social Security System and it is called the SSS Calamity Assistance Program (CLAP). The SSS Disaster Assistance Program is for any Filipino member affected by a calamity and in need of financial assistance.
Due to the continuous rise in the number of Covid-19 cases, the government declared a state of calamity in the Philippines and was under strict quarantine. This led to the temporary closure of businesses and many people lost their jobs. Almost every family faces financial difficulties in every household. Fortunately, the social security system offers calamity assistance to Filipino members affected by the pandemic to help them get back on their feet as the pandemic affects their lives tremendously.
SSS Calamity Loan
The SSS Calamity Assistance Program (CLAP) offers a credit amount of up to PHP 20,000 based on your average monthly salary credit and has an average interest rate of 6% (previously 10%). As with any mortgage, you will have to pay payday every month. SSS Calamity Support offers a payment term of 27 months. However, you won’t start paying until four months after you receive the approval date.
Filipino members can now request SSS emergency assistance online through SSS websites or using their MySSS account through the SSS mobile app.
How to get an emergency loan
There are many ways to get an emergency loan from a bank, pawnshop, private loan agency, and you can even get it from a friend. If you know you don’t have enough savings in your bank account or if you know it wouldn’t be enough in an emergency, it’s never a waste of time to be prepared.
Always check your credit score. Your qualifications to obtain a emergency loan depend on your credit score, especially if you plan to get an advance from the banks. In addition, having a good credit score could get you a better interest rate and better payment terms, in short, a good deal!
Look for better alternatives. We understand that taking out an emergency loan means you need the money right away. Nevertheless, we strongly recommend that you research different options that could help you save money. Always plan and check the sites of the various online lending companies, pawnbrokers, banks and online government to ensure that you will get the best deal around.
Emergency loan with bad credit
Having an unexpected need for cash can be overwhelming, especially when you don’t have enough savings in your bank account. Whenever this incident happens, we often think about getting emergency help. But what if we have bad credit on our credit reports? Well, you don’t have to worry. You can still qualify for a loan, but with limited options. The options available often offer higher interest rates with at least 30% or even more depending on how low your credit score is.
In addition to borrowing from a bank, you can also borrow from pawnbrokers, private loan agencies, government programs, and even from your family members. Always have emergency loan services, especially for borrowers with bad credit. You will never know when or where you will need cash or an emergency medical loan.
emergency loan request letter
Some conventional bank lenders or loan companies require a emergency loan request letter before the company approves your request. The letter should include the applicant’s name, address, and other personal information, the amount, and the reason for the emergency advance. Be sure to include your credentials in the letter or how you plan to pay off your debt and why you should be funded. This way, the bank will have more reason to quickly accept your request. There are tons of guides on the internet on how to write a proper cover letter request that might help you.
Remember to include the rest of the requirements with your letter to get your application approved.
Online emergency loan
Due to the pandemic, going to check out and asking for an advance is sometimes not an option. Luckily for us, we can now canvass different companies and agencies that offer emergency cash advances using our phone, laptop or computer online using UpFinance!
UpFinance has made financing and borrowing in the Philippines more convenient and faster. Visit the official website of UpFinance and choose the type of loan you are looking for, you will immediately see the best companies that offer the financing you need.
They have a large number of trusted partners to keep their customers safe. Some of their partners include well-known banks, cooperatives, investment companies and pawn shops, such as BDO, BPI, RCBC, Home Credit, Ayala Coop, Palawan and many more!
Author Jejomar Baccay of Upfinance