Before reading this article it’s important to remember that personal loans should never be used as a sole source of funding. The examples here are aimed at people who already have an income that will cover the repayments of the loan as well their living expenses. The following examples are all fairly high-risk strategies but under the right circumstances, they can be a great way to use a personal loan in the Philippines to make money.
1. Invest the Loan in a Business
This is a high-risk strategy and not something that should be attempted without first considering the consequences of an unsuccessful investment. You can potentially lose all your money and in worst case scenarios, end up in more debt than when you first started. Thankfully, this isn’t always the case and with enough research and planning, there’s no reason you can’t use some or all of a personal loan to generate an income for you in the Philippines. Food and nightlife venues can be lucrative but are also quite high risk. The competition in tourist friendly areas can be especially tough. Online businesses are an often overlooked avenue of generating money from a personal loan and if you can find somebody who is already well established and simply needs a little financial backing, there’s the potential to get a fairly substantial return without having to do a great deal of work yourself. Most people don’t consider this kind of option as they generally use loans for everyday purchases or larger, one off item such as cars or holidays but for those who are willing to accept the risk, this can be a way of turning your debt in to profit.
2. Buying and Selling Used Goods
Though generally speaking, most people who apply for loans in the Philippines do so to cover living costs or to pay for life’s little luxuries, some of them use part or all the money in a slightly different way. With enough experience and a sharp eye for a bargain, it’s possible to use sites like amazon and eBay to create a small but lucrative online store. Laptops, smart phones, action figures, vinyl records and bespoke fashion items are just a few examples of items that can be picked up very cheaply and then sold at a better price after a little maintenance or tlc. Like most of the ideas on this list, this is not an easy option and its certainly not a guaranteed way of making a profit but many people across the globe do manage to turn a profit from buying and selling used goods online. It can also be worth looking around the marketplaces in the Philippines as you can potentially find some unbelievable bargains. (Though do be aware of stolen or fake items.)
3. Buy Property to Rent
Buying property in the Philippines is generally cheaper than many other places in the world, so it may be possible to secure enough to purchase a building with funding from personal loans. If you are willing to act as a landlord or perhaps pay a letting agency to do this for you, this type of arrangement can work very well as the rent payments can be used to cover your repayment costs. Before buying anywhere, ensure you check all the building’s credentials and structural integrity. It may be worth using a professional surveyor to do this. Also be mindful of the location. If you are planning to buy somewhere that can be rented out to tourists or travellers, you will need to account for things like public transport, proximity to local attractions, plus issues with Wi-Fi or other services. If you have some experience of property management, using a personal loan to fund some or all a new venture can be a great way to allow yourself a slightly higher budget. Just remember that there is always a risk of losing money when you’re dealing with property, so never rush in to deciding until you’re sure you’ve found something worth buying.
4. Savings Accounts
This option won’t make you a great deal of extra money, but it may well change your spending habits for the better. Putting a little bit of your personal loan away into a savings account can be a good way of building up a small nest egg that can be used when you need it. Interest rates aren’t great at the moment, but you can expect your money to generate something if you are prepared to leave it alone for a while. This idea is something that you should only consider if you are on top of your finances and know that you can afford to make regular payments to your loan provider each month. Most banks in the Philippines will accept ex pat or overseas customers but there is generally a set amount you have to contribute before you can start earning interest. If you are about to receive a sum of money from a pension, redundancy or in the form of a gift, using a personal loan to open a savings can be a way of starting your saving journey a little earlier.
5. Stocks and Shares
Like gambling, the stocks and shares market are unpredictable, potentially unstable and something that should only really be considered by those with a full understanding of the potential risks. Saying that, a clever investment of just a few hundred dollars can potentially make you a lot of money in a relatively short space of time. First time investors should seek advice from professionals before committing to anything and may even benefit from making very small investments as a starting point. In simple terms, never invest what you can’t afford to lose, that way you shouldn’t find yourself in a worse situation then when you started out.