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Pros & Cons Of Online Loans: What Filipinos Need To Know

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Traditional bank loans often require a lot of verification processes and credit background checks when analyzing a user’s credit capacity. As a result, more Filipinos resort to online loans, which usually do not require rigorous processes.

Following the popularity of these online loan platforms, there has been a significant surge in the download of loan apps in the Philippines, and the upward trajectory is expected to continue in the coming years.

While these online loans can be helpful for most middle to low-class Filipino citizens, some cons are attached to using these services. This article will elaborate on these pros and cons so you can know what to expect from loanonline.ph as a Filipino.

Pros Of Online Loans

Pros Cons

Below are some of the significant advantages attached to using online loans in the Philippines:

  • Easy Application Process

One of the critical highlights of online loans is the easy application process. Depending on the loan service, you can start and finish the process using your smartphone or computer. Once you fill in your details and select a loan amount, you must wait a few minutes for your loan decision to appear. You can immediately receive your money once you receive a final eligible loan amount.

  • Good Credit Growth

Your credit grows at a rapid rate while using online loans. Thus, while your first loan amount may be relatively small, repaying on time can make you eligible for substantial loan amounts.

  • No Collaterals Needed

Unlike traditional loans from banks, online loans do not require any form of collateral. Thus, you are not required to provide any property to secure a loan.

  • Flexible Loan Repayment

Online loans support flexible repayment plans. Thus, loan repayment becomes more straightforward, as repayment can occur in small installments.

Cons Of Online Loans

Though online loans have many advantages, there are also some downsides to using these loan services. Below are these disadvantages:

  • Short Loan Term

The repayment duration of online loans is often short. Depending on the loan service, you may have to repay your loan between 15-30 days or pay high interest for longer repayment plans.

  • Small Loan Amounts

Most loan providers offer small loan amounts for new users. Thus, securing a reasonable loan amount is not often easy.

  • Unfavorable Interest Rates

Since online loans do not require any form of collateral, their interest rates are much higher than regular bank loans. Thus, depending on the online loan provider, you can expect to pay as much as 10-20%+.

Online Loans In The Filipino Market

In the context of this article, the term ‘online loan’ represents the general form of loans that users can obtain from financial services online. Thus, there are different kinds of online loans Filipino users can access, and the loan amount depends on several factors.

Some of the significant online loans available in the Filipino market are:

  • Salary Loans

Salary Loans are just like personal loans. However, depending on the loan provider, they often have higher maximum loan amounts. With a salary loan, you authorize an online loan provider to deduct a certain amount from your monthly paycheck until your loan amount is completely paid. Most salary loans work according to your salary range. Hence, higher-salary workers are more likely to receive bigger loans from online loan providers.

  • Personal Loans

Personal loans are primarily all-purpose loans available on most online loan platforms. It is the most popular loan in most online financial institutions and often comes with a flexible repayment plan. It works just like every other loan but is specially designed as a quick loan for minor individual expenses like billing, food, and even medical expenses.

  • OFW Loans

Often shortened as OFW, Overseas Filipino Workers’ loans are loans set aside by online loan providers to support the pressing needs of overseas Filipino workers and their family members. They operate similarly to salary loans but are designed especially for overseas Filipino workers. You can only borrow a loan amount close to your monthly salary or twice the value at most.


Whether in the Philippines or other parts of the world, online loans always come in handy, as they provide a more efficient and fast loan experience. However, there is a need to know what you are signing up for and, thus, the importance of articles like this. While there are many advantages to using these online loans, there are also a few disadvantages ranging from high-interest rates to shorter repayment terms.

Overall, while bank loans may be perfect for bigger loans, online loans are preferable for small personal loans, as they provide quick cash on the go.

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