In the Philippines, borrowing money is sometimes seen in a negative light. When we examine the wider history of financial inclusion in the country, this attitude is unsurprising. For many Filipinos, credit cards and regulated loans from traditional banks have often been out of reach. Instead, many people had to turn to informal lenders, ranging from agreeable family members to sketchy “5-6” operations. Thus, for such people, borrowing meant risking permanently strained relationships with loved ones or more serious ruin at the hands of informal debt collectors.
Fortunately, things are much different these days, thanks to emerging digital-first borrowing solutions like Maya Easy Credit and Maya Personal Loan. These and other similar products have enabled millions of Filipinos to access truly viable alternatives to credit cards and traditional bank loans, creating a new wave of financial inclusion in the country.
Even so, credit management remains a complicated undertaking for some people. Though many now thrive thanks to better access to high-quality loans and credit products, a small minority of Filipino borrowers continue to experience dreaded debt spirals.
Presenting a nuanced view of why this can be complicated. Indeed, many responsible borrowers have to contend with macroeconomic shifts and other factors that they cannot control. However, within the realm of what can be controlled, borrowing outcomes often boil down to mindset, discipline, and a wider understanding of debt’s role. Let’s dive into the differences between thriving borrowers and those who struggle to make credit work.
Thriving Borrowers Use Credit as a Strategic Tool
Those who build a sustainable, dignified life with credit do not see loans as free money. They understand that debt is a tool and that the best outcomes are only possible when you match the best loans available to one’s real needs.
Maya offers accessible, regulated credit through Maya Easy Credit and Maya Personal Loan. For short-term expenses like utility bills or small medical emergencies, Maya Easy Credit proves to be an easily accessible virtual credit line that offers up to PHP 30,000 to qualified Maya users. The funds are payable within 30 days, and borrowers enjoy service fees as low as 3.99%
For larger milestones, like weddings, home renovations, or starting a small business Maya Personal Loan provides even more funding, offering up to PHP 250,000 in funds, repayable in terms of 6, 9, 12, 18, or 24 months, and add-on rates starting at just 0.77% per month.
More than simply knowing what’s out there, thriving borrowers also practice restraint and discipline. For example, rather than maxing out their credit line just because it’s there, they tend to borrow only what they truly need. This pragmatic approach keeps their repayments manageable and avoids interest and penalties that inflate the cost of their borrowings. Over time, these careful habits help thriving borrowers qualify for higher credit limits and better loan opportunities, giving them even more financial leverage to achieve more in life.
Struggling Borrowers Often Use Credit as a Shortcut to The Good Life
On the other end of the spectrum are borrowers who treat loans as an endless extension of income. These borrowers are more likely to use their borrowings on impulse purchases or luho rather than on essentials or productive goals.
To be clear, using credit to treat yourself is fine if you have the guaranteed cash flow to cover it, but struggling borrowers do not always plan that far ahead. Indeed, some risk years of payments just to pay for fleeting luxuries.
Unfortunately, struggling borrowers often fail to plan their debts, even when they otherwise have respectable incomes. It’s not unusual for them to juggle multiple debts without a clue when they will pay them off. This can sometimes lead to a debt spiral where they borrow from one source to cover another. When this happens, these borrowers are left with little or no breathing room for savings or emergencies.
Speed and Access Make a Difference
One under-appreciated reason some borrowers thrive is that they choose safer loans. Unfortunately, not all of us have a rich, benevolent friend or relative to lend us cash, which leads some to turn to risky, unregulated lenders. Thankfully, digital banks like Maya reduce this risk by offering easy-to-access credit with transparent terms, secure in-app applications, and quick disbursement.
You can apply for Maya Easy Credit with just a few taps on your Maya App and be able to transfer funds from your approved credit line to your Maya Wallet in moments. Alternatively, you can also use Maya Easy Credit directly as a payment method when checking out online or scanning to pay with QR in participating merchants.
On the other hand, the funds you borrow through Maya Personal Loan go straight into your Maya Wallet once approved, letting you fund major needs without waiting weeks like you would with a traditional lender. Note that all applications are subject to credit evaluation.
Building the Right Borrowing Mindset
Borrowing success is all about cultivating the right mindset. You won’t get far if you depend on luck or fail to consider the bigger picture. Always try to do the following.:
- Borrow with intention. Every peso you borrow should have a purpose. Whether it’s to support an immediate need or a long-term goal, you should always have a real objective in mind.
- Read the fine print. Don’t believe headline rates and look at the fees and other associated costs of borrowing. If the lender is evasive about these, look for a different provider. Preferably, one that gives it to you straight.
- Think of your credit profile. It’s not just about avoiding interest and late fees. Timely payments today mean bigger limits and better terms tomorrow.
- Credit is not a perfect substitute for savings. Credit lines cannot totally replace an emergency fund. Work to build a viable emergency fund before you commit to a large loan.
Can You Walk the Fine Line Between Leverage and Liability?
Doing one’s homework and applying discipline can be enough to help most people manage their borrowings. Thanks to Maya, you now have access to fully-regulated borrowing options, right on your phone.
Maya Easy Credit and Maya Personal Loan are carefully designed by the country’s #1 digital bank to give you the transparency, safety, and access you deserve. Through the Maya App, you’ll get access to instant approval and disbursements within a secure and convenient digital ecosystem. Stay aware and responsible, and you’ll find bank loans and credit lines to be a powerful ally in building your future, just the way you’ve planned.
