10 Alternatives to borrowing in the Philippines

July 19, 2019

Debt can be a serious problem for some people and if you don’t make regular repayments towards the amount you borrow, you can potentially lose your home or other assets you may have. Thankfully, this kind of situation is usually quite rare as people are beginning to understand the consequences of taking out secured or unsecured personal loans in the Philippines. In some situations, borrowing from one of the approved lending organisations in the country may be your only option but there are some alternatives you may want to consider before you decide to sign up for a loan or a credit card.

Additional Employment

If you need a small amount of extra money every month, a personal loan can be a good option but only if you are able to meet the cost of the repayments without struggling too much. If you find yourself in a situation where you need to keep borrowing, just pay your bills and housing costs, it could be time to start looking for a second job. Bar work, waitressing, online administration and casual jobs such as tour guide or host can be great ways to supplement your existing income and avoid having to borrow more than you can afford. Ideally, second jobs should not be so demanding that they impact on your health and they should also allow you to see family and friends on a regular basis.

Selling Unwanted Goods

Be honest with yourself about the things you really need and the things you that you could live without if you tried. Many of us get used to living quite luxurious lives, especially when we are in well paid, full time employment. In reality, you don’t always need a great deal of material possessions to be happy. If it’s an option for you, consider taking a look around your home to see if there’s anything that you could potentially sell, either online or at a local market. Electronic items, clothes, shoes and furniture can generate a surprising amount of cash, providing you sell to the right person.

Tight Budgeting

Cutting back on treats such as alcohol, sugary snacks, subscription services and restaurant meals can have a significant impact on your finances each month. If you are really strict with yourself for a few months, you can potentially save enough money to prevent yourself from having to borrow any more. This isn’t an option for anybody, but many American, European and British families can potentially save hundreds each month, simply by sticking to a strict budget and exercising a little self-discipline. Though this can be challenging at first, once you are in the habit of doing without those expensive treats, you will eventually get used to your new lifestyle. This makes the occasions where you do splash out all the more special.

Pawnbrokers

This practice is commonplace and very popular in the Philippines. If you have something of value that you can live without for a period of time, it could be an option to use a pawnbroker to get some cash when you need it. Essentially this involves selling the item, usually at a slightly reduced price and then buying it back later when you can afford to. Things like laptops, high quality mobile phones, audio equipment and jewellery are accepted but you can also pawn other things like expensive or designer clothes. This option isn’t something that’s recommended on a regular basis, but it can be a useful solution to short term money issues and can prevent you from having to sign up for a salary loan or personal loan when you can’t really afford it. A word of warning, though, always remember never to pawn anything that has sentimental value as there is always a chance that it can be sold.

Downsizing Property

This is something many people have to do in later life, especially those who are considering retirement. Moving to a less expensive property can save you money whether you’re a homeowner or somebody who rents. Older parents often consider this after their children have grown up and moved away as they suddenly find the large space a little too big and empty for their current needs. Downsizing can save couples and individuals a considerable amount of money each month and in some cases, this can be enough to prevent them from having to take out a loan or credit card. This option doesn’t have to mean moving to a poor-quality home as many well-appointed and beautiful properties in rural parts of the Philippines are available for a fraction of the price you would expect to pay in the city. Similarly, comfortable and very modern apartments are available in most major cities for far less than places like New York, London or Berlin.

Switching to a cheaper car

Cars can be expensive, especially when they need repairs or maintenance but if you are willing to put functionality and practicality before luxury, there’s no reason your transport has to be a drain on your finances. Switching to a simple, reliable second-hand vehicle and using the money you have made from selling your old car is a great way of avoiding unnecessary borrowing. In the Philippines, the transport system is relatively well established, so you could also consider going without a car entirely. This is probably more feasible for those living in urban areas, but it can be a great way to generate a large amount of cash without having to sign up for a loan you don’t really want.

Summary

Using loans in the Philippines to cover life’s expenses is something many people do without a problem and it can be a great way of ensuring you can get what you need without having to save. However, it is essential to remember that there are alternatives to borrowing and that you should always consider these options before deciding to commit to a financial agreement between you and a lending provider.