Can I Get a Loan Without a Credit History? Answering FAQs AboutConsumer Loans

Consumer loans and other similar credit programs, like virtual credit lines, are an important financial avenue for helping individuals meet their personal needs, from unexpected expenses to consolidation of debt. In the Philippines, many people rely on these loans and credit lines for their flexibility and ease of
access. However, for those who are new to borrowing or don’t have a credit history, applying for a loan or similar kind of program may seem complicated or even intimidating.

Since traditional lending institutions typically assess creditworthiness through a credit score, sometimes it can be hard for first-time borrowers or those without a track record to secure a loan. The good news is that it’s still possible to get a loan even without a credit history. Thanks to the rise of digital banks, Filipinos now have the option borrow money online   through avenues like the Maya app. These digital platforms have simplified the lending process, and some use different criteria to assess applicants.

If you’re considering applying for a consumer loan, it’s important to get all the essential information. Whether you’re looking to borrow for the first time or just need some clarity, below are some common questions and answers about consumer loans. You’ll likely benefit from knowing more about different types of consumer loans and their terms so that you can weigh the best options available.

1) What Exactly Are Consumer Loans?
Consumer loans are financial products designed to help individuals fund personal expenses. These loans are typically unsecured, meaning that they don’t require collateral like property or vehicles, which makes them more accessible. Often, consumer loans have fixed repayment terms, which means that you’ll repay the borrowed amount in equal installments over a set period. In terms of interest rate, it can vary depending on the lender, the loan amount, and your financial profile.

One of the common types of consumer loans available in the Philippines is personal loans. These are versatile loans that can be used for anything from starting a small business to topping up emergency funds and offsetting unexpected medical expenses.

2) What Are the Requirements When Applying for a Consumer Loan?
Regardless of whether you’re borrowing money online from a traditional bank or a digital bank like Maya, it’s important to understand the specific requirements they might ask for when applying for a consumer loan. While the basic requirements are similar to those of traditional lenders, digital banks may also rely on alternative data to assess your eligibility. 

Just like traditional banks, digital banks will require a valid government-issued ID, such as a passport, driver’s license, or postal ID. This is necessary to verify your identity and prevent fraudulent applications. Depending on the program or institution, proof of employment or source of income may also be required for the application.

Since digital banks operate primarily online, having an active bank account or e-wallet is typically a requirement. This account is where your loan disbursement will be sent, and it will also be used for repayments. Maya will require your Maya e-wallet account to be verified if you want to qualify for a personal loan, and using the app frequently will increase your chances of getting your loan approved.

Digital banks will also require you to provide an active mobile number and email address for communication purposes. This information is essential for notifications about your loan application, approval status, payment reminders, and other important updates. 

3) How Do I Apply for a Consumer Loan?
Applying for a consumer loan in the Philippines is a relatively straightforward process, especially with the rise of digital lending platforms including digital banks. Firstly, you need to research your options. It’s important to compare lenders based on interest rates, repayment terms, and eligibility requirements. Once you’ve found the ideal lender for your needs, you’ll need to fill out the application form accurately and submit the requirements, including documents previously mentioned above. 

Then, all you have to do is wait for approval. Fortunately, when you apply for a consumer loan from digital banks, the process doesn’t take as long compared to traditional banks. Often, digital banks can assure faster approval times, with some offering decisions within a day or as quickly as within a few
seconds, like Maya Loans.

4) How Much Can I Borrow?
The amount you can borrow depends on several factors, including your income, the lender’s policies, and your financial needs. For first-time borrowers without a credit history, digital banks typically offer smaller loan amounts as a way to mitigate risk.

5) How Do I Pay Back the Loan?
It typically isn’t very difficult to repay a consumer loan, thanks to multiple repayment options being available. Traditional banks may have an auto-debit arrangement where payments are automatically deducted from your bank account on the due date. Digital banks also allow borrowers to pay
conveniently through their mobile apps or e-wallets.  To ensure timely payments, familiarize yourself with your loan’s repayment schedule. Setting reminders
or automating payments will help you avoid late fees and penalties.

6) What Happens If I Can’t Pay on Time?
Late or missed payments can also have significant consequences, so it’s important for you to understand what’s at stake. Keep in mind that many lenders impose late payment charges, which can quickly increase your total debt. If the amount remains unpaid for an extended period, some lenders may pursue legal means to recover the debt.

Again, regardless of what consumer loan you decide on, you’ll want to know all about your options and prepare thoroughly. Whether you’re borrowing for the first time or looking to build your financial profile, the key to making the most out of any consumer loan is responsible borrowing. May these tips prove useful when you explore the many types of financing currently available to you.