What are the tips to avoid illegal lenders in the Philippines?
- Steer from deals that are ‘too good to be true’
- Don’t give up your ATM account
- Be wary of sky-high interest rates
- Always ask for an official contract
- Ask for a license to operate
- Look for other legitimate ways to borrow money
Although there is a trusted online financing company in the Philippines, countless customers are still being preyed upon by illegal lenders. Whether it’s sky-high rates, false marketing ads, or dubious agreements—they will do everything to take advantage of your money! To help you, here are some tips to avoid illegal lenders in the Philippines.
Steer From Deals That Are ‘Too Good To Be True’
Has someone ever reached out to you to offer 0% interest rates? While numerous customers would be tempted to apply for this type of loan, this would only be possible in a perfect world.
This is because as businesses, financing institutions—including banks—still need to make profits so they can pay for rent, electricity, and employee salary. This is not possible if they have to provide a loan with zero interest.
That’s why if you receive a similar offer, this should be the cue for you to run away. Scam artists use this tactic to bait potential customers into loans with hidden fees, unusual payment practices, and more.
Don’t Give Up Your ATM Account
Speaking of unusual payment practices, have you heard of lenders operating with a ‘Sangla ATM’ Scheme? They will require you to give up your bank savings card and PIN before you can secure a loan. Doing this will give them sole control of your ATM account, which is definitely something that you don’t want to happen.
Some of these self-proclaimed financing institutions even have websites and social media pages to make them seem legitimate. They do this to tempt low-income employees with fast and easy loans.
One day, they might even withdraw more than the agreed amount you talked about. After all, your Christmas bonus and 13th-month pay is deposited in your ATM account. Other than that, these schemes are usually coupled with high interest rates.
Be Wary Of Sky-High Interest Rates
Because illegal lenders target desperate victims who are looking for quick cash, they know that they can charge exorbitant interest rates. Some of them even take advantage of this reason to double your loan payments.
While this seems like a good idea if you need cash, it will only make it easier for you to have more debts. If you can’t pay in time, they might use this opportunity to increase the interest rates and make it even harder for you to get out of the system.
If you don’t have a legally binding contract to adhere to, you won’t have a choice but to accept these terms. Otherwise, they might resort to threats or even violence.
Always Ask For An Official Contract
For this reason, it is a good idea to ask for a written document every time you transact with a financing institution. If they’re hesitant to give you a formal loan contract, this is a sign that they’re planning to change the terms sometime in the future.
And because you only have a verbal agreement, you can’t provide evidence when you’re filing for a complaint. But with a business registered and tax-paying financing institution, you won’t have to ask for a formal loan contract because they will automatically provide it for you.
Ask For A License To Operate
So what do you do before applying for a loan? Double-check with the Securities and Exchange Commission (SEC) if the financing institution you’re talking to is registered and has the necessary licenses to operate.
According to Philippine law, the commission is tasked with the monitoring of financing and lending companies in the country. This way, you will have the guarantee that you’re transacting with a legitimate company.
Because some illegal lenders may seem professional these days but that’s just their tactic to lure you in. With advertisements all over the internet, they may have already victimized numerous customers.
Look For Other Legitimate Ways To Borrow Money
Now that you know all the signs pointing to an illegal lender, all that’s left is looking for legitimate ways to secure loans. If you’re looking for quick cash, banks may not be your best option. With numerous requirements and multiple steps in processing your application, your waiting time will be slow.
That’s why if you’re looking for low-interest rates and fast approval time, a legitimate financing institution like Asialink Finance is your best choice! Officially registered with SEC, you know that they will abide by the rules when it comes to loans. Aside from that, they can also provide formal contracts and receipts for your review!
When you’re desperate, it’s easy to fall for baits set up by scam artists. Before you know it, you’ve already given up your ATM or settled for a loan without a formal contract. That’s why in every transaction, you should use these tips to avoid illegal lenders in the Philippines.
If you’re looking for low-interest loans with fast approval rates, Asialink offers multiple services to fit your needs! As a legitimate business in the country, you will have peace of mind whenever you’re transacting with them. For more questions and information, click here to get in touch with them!