ONE REASON it’s quite understandable that many people are afraid to borrow money is that any borrowing option, like a loan, will come with obligations. Borrowers must not only commit to regular repayments; they must also manage their interest costs and ensure they don’t take on more debt than they can handle.
But it’s worth considering for yourself that borrowed money from a reputable source can actually improve (and not detract from) your financial health.
With the money you borrow, you may be able to build your credit, top up your emergency fund, or support important life goals such as your education, home improvements, or even a business venture.
The best options that are available to you depend on the type of borrowing program and who your lender is. Lenders also assess various factors like your credit history, income stability, and repayment ability, all of which will factor into your approval. You’ll also want to brush up on concepts like loan terms, interest rates, and hidden fees on the money you’re borrowing in order to avoid costly mistakes.
With all that being said, there are a number of safe and reliable options available to first-time borrowers who want to explore new sources of financing while maintaining their current level of financial stability.
From options like a credit card program with an easy credit card application program to quick credit line programs like that of Maya Easy Credit, here are some of the safest borrowing choices you can consider if this is your first time to borrow money:
1) Low or No Annual-Fee Credit Cards
A low or no-annual-fee credit card is a great option if you’re looking to gradually build your creditworthiness while maintaining your financial flexibility. Unlike other credit card products, these cards allow you to access credit without the added cost of a high annual membership. This means that you can enjoy the benefits of using a credit card without worrying about unnecessary charges in your budget—as long as you’re using the card wisely. Once you learn how to make small, manageable purchases and pay off your balances in full each month, you’ll slowly be able to demonstrate responsible financial behavior and establish a positive credit history for yourself. This will signal to lenders that you’re a trustworthy individual to lend money to, which can increase your chances of receiving better financing offers and lower interest rates on other credit cards in the future.
2) Credit Lines
A credit line is a borrowing option that gives you access to funds when needed. It’s a particularly attractive alternative to a credit card, given that most credit card programs have lower approval rates and require both more documents and a previous credit history in order to apply. Although it works similarly to a loan, it doesn’t provide you with a lump sum upfront. Instead, you’re given a set credit limit from which you can withdraw money as necessary, making it ideal for managing unexpected expenses or short-term financial needs. Also, interest or fees are only charged on the amount used, which allows for more control over borrowing costs. One major advantage of credit lines is their revolving nature. You can repay what you owe and continue using the credit without needing to reapply. This can be particularly useful for those with fluctuating income or expenses, as it provides ongoing access to funds without the commitment of a fixed loan. In addition, a product like Maya Easy Credit may be quicker and more convenient to apply for than a traditional personal loan or credit card. To be eligible, you only need to meet the age requirement, be a Filipino national and resident, and have an upgraded Maya account; you don’t have to expect a long paper trail just to apply. Once approved, you can borrow up to PHP 30,000, enjoy service fees as low as 3.99% on the borrowed amount, and have up to 30 days to pay.
3) Personal Loans
If you need a fixed amount of money for specific purposes, a personal loan is one of the safest borrowing options for a beginner. This type of loan typically doesn’t require collateral, making it accessible to first-time borrowers with stable incomes. The application process is also straightforward—if you’re approved, you’ll receive the full loan amount upfront, which you’ll repay in fixed monthly installments over a set period. Personal loans can be used for a variety of purposes, such as medical expenses, home repairs, or consolidation of high-interest debt. Since repayment terms and interest rates are usually predetermined with personal loans, you’ll be able to budget your finances more effectively. Just remember how important it is to compare loan offers to find the best rates and repayment terms. You should also ensure you have the financial capacity to meet your monthly payments, as missed or late payments can lead to penalties and damage to your credit score. For a beginner-friendly option with favorable rates, you can check out a program like that of Maya Personal Loan.
4) Salary Loans
Salary loans are a practical borrowing option if you have a regular and stable income and if your employer offers this type of benefit. These loans are often offered by banks and lending institutions, where the amount you can borrow is based on a portion of your monthly salary. The repayment process is usually deducted directly from your salary, which makes the risk of missed payments lower. A key benefit of salary loans is their convenience and predictability. The fixed monthly repayments make it easier to manage your budget and pay off your debt on time. Additionally, interest rates on salary loans are typically lower than those on personal loans or credit cards, which will allow you to borrow funds at a more affordable rate. It’s important to ensure that the monthly deduction doesn’t affect your ability to cover other essential expenses. As long as you’re mindful of your financial situation and borrow within your means, a salary loan can be an excellent way to access funds with minimal risk and a learning curve that’s easy to follow.
5) Government-Backed Multi-Purpose Loans
Government-backed multi-purpose loans, such as those offered by the Philippines’ Home Development Mutual Fund (Pag-IBIG) or the Social Security System (SSS), also feature reliable and accessible borrowing options for first-time borrowers. These loans are designed to cater to a range of needs, from home improvement and education to medical emergencies and small business expenses. You can easily find financial assistance for life’s important goals through one of these programs.
What makes these loans especially attractive is their low interest rates and flexible repayment terms. Since they’re backed by the government, they also come with more lenient requirements compared to private loans. This allows borrowers who may not have perfect credit histories or extensive financial resources to still be able to access much-needed funds. Moreover, these loans are typically processed faster and offer longer repayment periods, making them a less burdensome option for many. If you choose your borrowing option wisely the very first time you borrow money from an institution, you may be able to get far ahead at achieving your personal goals and improving your long-term financial stability. While it’s essential to approach the idea of borrowing with caution and responsibility, perhaps now is a good time to borrow for the first time and to pursue a solid financial foundation for yourself.
