Everything You Need to Know About Collateral Loans in the Philippines

What are collateral loans? In case you didn’t know yet, a collateral loan is all about borrowing a money while pledging something you own as collateral. What this indicates is that you borrow money, but you need to present something in return for that money until it’s paid. To do this, you need to own a valuable item, such as a car or real estate.

Everything You Need to Know About Collateral Loans in the Philippines

In this post, allow us to present you with collateral information for the loan. Read further to know how to use collateral for a loan.

How Collateral Works

Bank loan using house as collateral is often needed when the lender prefers some guarantee knowing they will not lose their money. Pledging collateral items for a loan means the lender has the right to take action in case you stop paying on the loan. They will take ownership and custody of your collateral. They can now sell it and utilize the sale profits to pay off the loan.

Advantages of Collateral Money

You will find different advantages in opting to a secured loan with car or property as collateral. Some of these benefits are the following:

  • There is no cap on how much a borrower could borrow. The amount of the loan depends on the value of the pledged collateral.
  • You could get a secured loan if you are turned down for an unsecured loan many times. The deposit is a guarantee of your return. Banks are happy to approve collateral loans.
  • The borrower could borrow more cash than they could, along with an unsecured loan. An unsecured loan requires a good credit score, good income and stable employment.
  • A secured loan is usually issued at a low interest rate. You can compare several bank offers and choose the best one.
  • Collateral money is simple to loan to get, and it’s normally approved faster.
  • You do not need a job certificate or employment information. You will only need to submit property documents.
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Why Secured Loans Require Collateral

You can have secured loans by using home as collateral for a personal loan. It becomes a secured loan for the lender as he is secured through the collateral. He will be able to acquire the lent money back at the amortization. Take note that the debt is secured against the collateral. Thus, the creditor might take possession of the asset utilized as collateral in any event when the borrower defaults.

Everything You Need to Know About Collateral Loans in the Philippines

In short, the collateral acts as a lien. A lien is a type of security interest approved over an article of property. Its purpose is to shelter the payment of a debt.

The owner of the property who grants the lien is referred to as the lienor. A person who has the gain of the lien is termed as the lienee. Secured loans could be of different types depending on the type of security submitted.

Where is It Better to Take Collateral Loans?

Asiallink Finance offers different collateral loan options for their customers. The best thing about them is that there’s minimal documentation needed compared to banks. When you utilize this platform, you will have a ninety-five percent chance of being approved for a loan.

They offer car mortgage, truck mortgage, tricycle loan, PUV/PUJ/Taxi loan, and more for their collateral loan services.

People who want to get a bank loan using house as collateral can easily get it through BDO. The maximum limit is one million pesos. BOD’s interest rates are fixed of 1.30% per month, 1.25 per month, and 17.07% per annum, add-on for six months’ tenure.

Everything You Need to Know About Collateral Loans in the PhilippinesYou can get a personal loan using your car as collateral with Metrobank to purchase more assets or to fund other goals such as business expansion, education, or travel. You could cross many things off your list with a maximum loanable amount of 15 million pesos and the maximum term of ten years.

BPI (Bank of the Philippine Islands) is one of those financial agencies you can depend on to get collateral loans. The maximum

limit they offer is 1 million pesos, while the interest rates are 14.40% per annum. Just make sure you bring a government-issued ID picture and a 3 months original payslip.

PNB (Philippine National Bank) offers auto loan and housing loans that can be utilized for purchase of a brand new and for a house renovation, respectively. For instance, the maximum amount for car loans must be eighty percent of the cash list or buying price.

China Bank is one of the biggest thrift banks in the country. Their personal loan does not need any collateral items for a loan. That means it doesn’t need assets such as property or home from the borrower to secure a loan. Their Easi-Funds are very versatile and feature minimal documentation, the flexibility of purpose, the fast disbursal, and no security. This type of loan might be utilized for any type of purpose.

Bank of Insurance and Crediting (Security Bank)

One of the largest banks. It takes care of employees and customers, the motto of the company “You deserve the best.” Borrowers are offered auto loans and loans to buy real estate. Wages – from 40,000 Philippine pesos. It is necessary to work abroad for more than 2 years. To obtain a loan for real estate, you must have a salary of 50,000 Philippine pesos.

Pag-IBIG Fund

Everything You Need to Know About Collateral Loans in the PhilippinesA quick loan is available for club members who have deposited at least 4 800 pesos to their account and made payments for 24 months. A client can receive up to 80% of the existing savings. You can apply if there is a permanent source of income.

Annual interest is calculated individually. Grace period is valid for 2 months. It is necessary to repay the loan within 2 years.

PSBank

According to the PSBank Flexi Personal Loan program, you can get from 20 to 250 thousand Philippine pesos. The loan is available for the following categories of borrowers:Everything You Need to Know About Collateral Loans in the Philippines

  • age category from 22 to 54;
  • work experience not less than 2 years, in the last place of work not less than a year;
  • the presence of a permanent income of not less than 15 000 pesos.

Credit history or bank account is not required, although preference is given to people who actively use credits.

The funds are issued together with the bank’s personal card. Consideration of the application takes up to 3 days, delivery of the payment instrument – from 3 to 9. The monthly interest rate is 1.7%. Loan term is from 24 to 36 months.

RCBC

RCBC Savings Bank does not offer a credit option without a bank account. This requirement is one of the mandatory in any loan options. However, a client with bad credit history can still get credit funds here.

Lending terms:

  • minimum monthly income of 20 thousand Philippine peso;
  • annual interest 15,6%
  • return time from 6 months to 3 years;
  • borrower’s age 21-65;
  • collateral is not obligatory;
  • credit limit from 50 thousand to 1 million pesos.

SSS

SSS offers loans to club members. There are two options for a quick loan: a salary loan for 1 month or 2. A bank account is not required, the collateral can be used to increase the maximum credit limit.

Everything You Need to Know About Collateral Loans in the PhilippinesRequirements to the borrower:

  • age up to 65 years;
  • official employment;
  • SSS club membership;
  • 36 or 72 paid membership dues (for receiving one-time and double size of salary, respectively).

The loan is returned within 24 months. Annual rate – 10%.

 

Calculate

 
LOAN AMOUNT
FEE
TOTAL REPAYMENT

Requirements for Collateral Loans

Secured loans with car as collateral or using home as collateral for personal loans will have their own strict requirements. You will find that this is normally the collateral system everywhere in the globe. The first barrier in your way of lending is solvency. You will need to fill out a credit application form, confirm your income level and provide identification.

Your financial agency will check your official employment, credit history, as well as the available property. Then a bank employee will assess your collateral. It may be that his valuation will be lower than you expected. The bank must ensure that the value of the collateral fully covers your loan.

How to Get Collateral Loans Approved

Take note that the conventional practice is to bring a surety, have a well-paid work, or have a liquid mortgage. Bear in mind that the quality of your collateral influences the amount of your final loan as well as the deferral term. We suggest depending on the organizations with average interest on the market. You can also consider those institutions with great recommendations.

Borrowing without Collateral

Are you considering borrowing but don’t have any collateral? In that case, you will require looking for a lender who is eager to deliver and provide you money based on your autograph. The good thing is some options are available for you.

Online personal loan using your car as collateral are often unsecured loans with good rates such as peer-to-peer loans. Further, credit cards and personal loans are a good example of unsecured loans.

Borrowing without any collateral is not probable in some situations. In other cases, it might be an alternative to do without collateral. However, you will acquire a few options. The only catch is you need to pay a higher rate to borrow. But you do not risk your property, in case of debt, the bank will not take possession of it.

Conclusion

Are you trying to get collateral information for loan? We hope we presented you with helpful information you need on how to use collateral for a loan. A collateral loan is both a beneficial and dangerous type of cash loan. Before you proceed with registration, you should weigh all pros and cons. When the money is provided, the creditor wants to be sure that the money is returned on time in the amount specified in the contract. Banks can use various measures to return the funds. In this case, the client will become more serious about the repayment of the loan funds and will be afraid of losing the property. So you should try to repay payments in time.

How can I return?

Everything You Need to Know About Collateral Loans in the PhilippinesA collateral loan can be returned in several ways. It is necessary to return the amount on time, this has a positive effect on the credit history.

Experts advise paying a few days before the deadline, because the bank transfer procedure sometimes occurs quickly, and in some cases slowly, within a few days.

Each bank has its own payment methods. Most often it can be done in bank branches or online.

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