The Philippines has seen a surge of fintech companies and online lending platforms emerge as alternatives to traditional banks for accessing loans. But is turning to these digital lenders better than sticking with established banks?
Here we’ll weigh the pros and cons of using online lending apps instead of Filipino banks to help you decide which lending channel may be a better fit.
Pros of Using an Online Lending App in the Philippines
There are some key reasons Filipino borrowers may want to consider using an online lending platform over traditional bank services:
- Quick Online Application Process – You can apply digitally in just minutes without needing to visit a physical branch. Most lending apps only ask for basic personal details.
- High Approval Odds – Alternative credit scoring models give more chances for approval for Filipinos with limited credit history compared to banks.
- Receive Funds Fast – Approved borrowers can have money successfully transferred to their account within 24 hours. Much faster than banks.
- Fixed Repayment Terms – Online loans come with fixed tenors like 3, 6, or 12 months. This allows easy budgeting for repayment rather than revolving bank credit lines.
- Lower Barriers to Borrow – You can get approved for an online loan with minimal requirements. Banks require pay slips, proof of billing, guarantors, and more.
Cons of Using Online Lenders Over Philippines Banks
However, there are also some potential drawbacks to using digital lenders compared to established banks:
- Higher Interest Rates – The rates online lending apps charge are often considerably higher than traditional banks. But they disclose all fees upfront.
- Online-Only Experience – You lose in-person support and the ability to make payments in physical branches. Apps are 100% digital.
- Can’t Replace All Banking – Online lenders just facilitate loans. For savings accounts, credit cards, and other banking products, banks are still needed.
- Security Uncertainty – Startup fintech companies generally pose higher risks for data breaches or unexpected shutdowns compared to reputable banks.
- Credit Reporting Confusion – Standards vary regarding if or how online lenders report loan details to the credit bureaus. This can cause confusion on credit reports.
Cash Express: Top Online Lending Choice in the Philippines
For Filipinos seeking the best digital lending experience that balances speed, approval odds, affordability, and reliability, Cash Express stands out as a top choice.
Why Filipino borrowers should consider Cash Express:
- Fixed Processing Fee – No confusing interest rates. Just a set Processing Fee per approved loan. Complete transparency.
- Up to ₱20,000 – Borrow higher amounts than other lending apps. Funds from ₱1,000 to ₱30,000 are available.
- 98% Approval – Extremely high approval chances for loans through fast digital verification.
- 24-hour Funding – Receive money in as little as 24 hours after getting approved.
Whether you need money to cover emergency costs, household bills or anything in between, Cash Express makes getting an online loan easy, fast, and reliable.
Which is Right in the Philippines: Online Lenders or Banks?
All signs point to online lending apps being the better borrowing choice compared to traditional banks for most Filipinos.
Factors like quicker access to affordable funds and higher approval success cater to the needs of the average Filipino consumer. And the digital-first process aligns with increasing internet penetration and smartphone usage throughout the Philippines.
Banks still hold an advantage for those wanting to establish a complete financial relationship beyond just borrowing money. But for flexible personal loans up to ₱20,000, innovative fintech online lenders have banks clearly beat on nearly all fronts.
Ready to ditch your bank and get quick financing with an easy online loan application instead? Cash Express allows you to do exactly that and have funds sent to your bank account within a day!
FAQs About Choosing Online Lenders Over Banks in the Philippines
What are common interest rates for online lender loans in the Philippines?
Online loans often have interest ranging from 20% to 50% APR when accounting for processing fees over the total term. Banks offer lower interest closer to 10-20% generally.
What is the maximum personal loan amount I can get from online lenders?
Loan amounts range widely across different lending platforms. Most offer ₱1,000 to ₱30,000. Cash Express currently offers personal loans up to ₱30,000 – higher than competitors.
Can I apply for an online lending loan if I don’t have a credit record?
Yes, approval decisions emphasize alternative data like ID verification and mobile wallet history rather than relying only on credit reports. First-time borrowers welcome.
What happens if I miss making payments on my online lending loan?
You will be charged an additional late penalty fee according to terms agreed during origination. Sustained non-payment can also negatively impact your credit standing.
How do online lenders protect and use my personal data?
Reputable companies use encryption to protect your data and only share details internally to facilitate loan decisions and processing. Be sure to read privacy policies closely before applying.
