10 Things You Need to Know About Short-Term Lending

10 Things You Need to Know About Short-Term Lending

Borrowing money or pangungutang is a crucial part of Filipino culture. Filipinos loan to finance their expenses and to pay for their bills. The utang way of life is so apparent that it gave birth to several types of lending including the 5-6 system, sangla-atm and the modernized form of paluwagan. Bank and other lending institutions have beefed up their offers to provide a more comprehensive system of lending. Personal loans, business loans, easy cash, payday loans, and short-term lending are now available for anyone who can fulfill the requirements of the application.

In a nutshell, easy cash and payday loans are considered short-term lending but there are a few things you need to know to better understand the differences. GoBear shares with you the ten important things about short-term lending or short-term loans.

1. Can be paid in several installments

Payday loans require lumpsum monthly payments. Short-term lending can be paid back from two to 12 installments depending on the duration of your loan.

2. Cover for emergency expenses

Emergency expense


Whether you want to pay for an immediate large purchase or you want to renovate a portion of your house, short-term loans are a refuge that can provide you with instant cash.

3. Do not require collateral

Most short-term lenders do not require collateral or any form of security. In fact, you can cash out an average of Php10,000 by just presenting any valid ID.

4. Results are quick

loan approval


Borrowers don't have to wait for at least 24hrs before knowing the status of their loan application. Short-term lending gives you a feedback within the day, even within an hour after filling out the application form. The fast application and approval help most businessmen keep up with immediate expenses.

5. Different loan tenures

Lenders give you the option to pay back your loaned amount in 30 days, 3 months, 6 months or even up to one year. It all depends on your convenience and your capacity to pay. Just make sure you understand the charges, so you can choose the best loan tenure and repayment terms.

6. Interest rates vary

loan interest


There is no standard rate for short-term loans in the Philippines although the average imposed interest charge is at 4.95% per month. Personal loans have an average annual percentage rate of 13% - a charge far lesser than that of short-term lending and yet much more difficult to get approved for.

7. Limited loanable amount

Unlike personal loans which can shell out up to 5 times your monthly salary, short-term lending lets you borrow up to Php20,000. This means that you might want to borrow from several lenders if you need more.

8. Easy requirements

Short-term lenders won’t let you go through a tedious application process. They save you from preparing tons of documents like your bank statement, certificate of employment, Income Tax Return and Latest billing statement.

9. Transaction fees are imposed on repayments

Most short-term lenders tie-up with Most payment centers charge up to Php25 for every transaction.

loan repayment


When applying for short-term loans, consider all other charges including this to compute the entire cost of the loan. You may also ask your lender of the cheapest, easiest and most convenient mode of payment.

10. Improves your credit score

Once short-term loans are paid on time and completed, your credit score improves and you even get the chance to apply for a higher loan amount. All you need to do is to make sure you never missed payments and you have settled your previous loans. 

Learn more about short-term lending today and you'll never be afraid to meet emergency situations in the future! Compare short-term loans with GoBear!