Loans can be used for just about anything that you need, whether that be to buy a new smartphone, or any other gadget and appliance, or even just to pay off something, it surely can be useful for any middle class working Filipino. But, before engaging in any loan service, it is important to first learn about all the things you might need in order to know which fits right for you and your expenses.
With the influx in Home Credit’s promotional advertisement in malls and other platforms, there has been a lot of talk on whether it is a viable option or just another scam to avoid altogether. But don’t you worry, we got you covered! Keep reading to know about everything there is to know about Home Credit, its pros and cons, and whether it’s applicable for you.
A brief background
Home Credit Philippines is a global consumer finance expert, with a leading presence across 13 countries in Central and Eastern Europe, Asia and North America. It basically deals with money lending, which can either be a loan or credit. Since it started its operation in the Philippines in 2013, Home Credit has become the fastest growing consumer finance company in the country catering to more than 7 million patrons since their first operation. So, what exactly attracts these customers? A few reasons may be the following:
- Easy Requirements
For Filipinos that are always busy and on-the-go easily acquirable requirements for any service is a huge plus, because it’s less time consuming therefore less of a hassle, which is why this is a huge strong suit for Home Credit and what usually catches the eye of its customers. The application only need to meet the following requirements:
- 2 Valid ID – At least 1 government-issued and 1 must contain current address (A full list of Primary and Secondary IDs allowed can be found here)
- Stable Income – Must bring certificate of employment or bank statement for proof
- A Filipino Citizen
- Aged 18-68
- Fast Approval
The company’s approval process can usually be completed within 1 minute to 1 hour after completing the application form with the given Sales Agent. This is done to ensure that approved customers are satisfied and will be able to bring home their loans within the same day.
- Convenient Payment Options
In order to allow their customers easy access in order to avoid penalties and charges, the company has multiple payment channels available nationwide, which can be used 24/7 even on holidays. A few of their payment channels include:
- PALAWAN EXPRESS
- VILLARICA PAWNSHOP
- Cebuana Lhuillier
- Mastercard or Visa debit card
- SM BILLS PAYMENT
- A full list can be found here
There are also multiple partner stores available, 3500 stores nationwide in particular, which can be found here.
- Flexible Installment
One of the benefits that you can get in Home Credit is being given the option of a payment plan or how long you want your loan period to be, ranging from 6-24 months. You will also be given the option of an insurance if you are opting for security, and also the option to pay early if you want which can lessen the fee.
- Accessible Loan Management
Customers may view their loan details and payment information anytime online using the My Payments web portal or it can tracked through the mobile application My Home Credit App. Payment information can also be checked through the Customer Service Hotline Daily 9am – 6pm: (02) 7753 5711
Now that we’ve established what draws these customers in, we now have to figure out what exactly are the setbacks of Home Credit that are causing people to feel apprehensive in engaging with the company and their money lending services.
- High Interest Rate
Home Credit doesn’t publish its interest rate and may vary depending on various factors such as the price of the item you want to buy, the down payment you can afford and your chosen payment terms. But home credits are notorious for having higher interest rates than a bank loan or a credit card. From the Loan Calculator provided in their website the rates range from 29.28% to 73.13% which is a relatively high percentage for most borrowers.
The customers are offered a 0% installment feature in the company’s credit card plan to avoid this high interest rate but this is only possible if you pay your bills in full and on time.
- Annoying debt collectors
One of the main problems that users often get from choosing Home Credit is their persistent loan collector system. Most of the time, the borrowers will be bombarded with phone calls even 5 days before their due date. If the customer isn’t able to answer the agent will continue on to call the family member’s contact listed upon application. Keep this in mind before opting for Home Credit.
- Fees and Penalties
In the instance that you miss a payment, you will automatically be given a late fee, and will be recorded as having a bad standing in their company which may cause you to be declined for another Home Credit loan. Furthermore, if you are considered a “Delinquent Borrower”, your credit score of history will be greatly affected and the unpaid loans will be reflected on the report which will impact your future transactions.
- They won’t leave you alone
So, what if you are a good payer and don’t miss any due payments? You guessed it! You will still be bombarded with calls and emails offering a new loan. This is a strategy done by the company in order to encourage their patrons to continue on with their service. The customers are usually called at least 3 days before their due date to be offered a new loan even if you have already declined.
- Loans, Loans, Loans (Increasing debt)
With the everyday need for financing and Home Credit offering you another loan plan, you might be vulnerable to take another loan even if you already have a pending one. This will cause your debt to stack up which can further cause problems in the future. Make sure that before entering into the engagement with Home Credit, you can sustain your monthly payment dues.
Home Credit can provide an easy and convenient way of helping you if you are in a bind and is desperately in need of money. They are a legit business which strives to offer money lending services to the ordinary middle-class Pinoy, but, much like with similar companies, there are many drawbacks like the ones mentioned before.
One must be mindful first of their situation and figure out whether loaning is the way to go. Consider first your expenses and income, and then compute if it can sustain the high interest rate of the company. If not, maybe this isn’t the move for you and it’s time to look for alternatives which may include banks and credit cards. Whatever it may be, in order to not drown in debt we advise to explore and study all possible options before being involved with any type of loan to choose the one most suitable for you.