The ongoing pandemic has a multi-level impact on everyone’s life. On a broader scale, the full implication on the Philippine economy is yet to be determined. While current bad debt level remains manageable, the Bangko Sentral ng Pilipinas said it could double when 2020 concludes, potentially leading to banks tightening up even more. Good thing, there are lending institutions that are still capable of providing financial assistance to private individuals in the form of collateral loan at equitable rates.
We can give 4 reasons why a collateral loan is better, especially during this time of pandemic.
Faster Approval
Collateral loan is a secured loan, as it requires the borrower to present an asset that the fund provider will treat as a form of security. If you are putting something out for collateral, you can also expect that it will be easier to build a bond of trust between you and your lending partner. Of course, the process will include valuation and verification of the property prior approval and granting of loanable amount.
Another good thing about collateral loan is that lending institutions will more likely approve of an application even if it is coming from a person with a not-so-good credit ranking.
Efficient, Flexible Means to Grow a Business
Whether you already own an existing business or about to establish one, a secured loan is appropriate for you. Now that banks are reportedly tightening their belts because of the pandemic, you need to find a good alternative for supporting your business venture. So, rather than keeping an asset, why not maximize its full potential by using it as a collateral to get the necessary funding for business?
Bigger Loanable Amount
When you apply for a non-collateral loan, the biggest determining factor of your loanable amount will be your capacity to pay. When getting a collateral loan, you can get a bigger amount depending on what you put up for collateral like a car, and a land or condo title. If you’ve decided on what to offer as collateral, the asset will be appraised and the determination of your loanable amount will be compounded with your loan purpose. So you can get a reasonably big amount if for example you will put a land title loan as collateral with a purpose of starting a business.
Low Interest Rates
Aside from having faster loan approval, you also can avail of the loan at very low interest, subject to the fund provider’s terms. While you aren’t really putting your property at risk, you can reap the benefits of getting a big amount as quickly as you can fill up your form with very low, almost unnoticeable interest rate.
While it feels safe to get a non-collateral loan, you will be enjoying more benefits in terms of saving time and money, and executing a secured loan by choosing a low interest collateral loan.
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