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The reality of the modern world means that salary loans in the Philippines are becoming more commonplace, especially among younger people and those without stable employment. Though they are never to be used as a permanent means of funding, they can be a good way to make sure you aren’t missing out on life’s essentials when your wages don’t quite cover the costs. To manage a salary loan properly, the chances are that you will need to make significant sacrifices. This can actually be a positive thing in the long run as it can teach you new habits and better ways of managing your finances in general.

1. They can make you more mindful with money

Mindfulness and meditation are popular in the Philippines and across the world but few people relate them to the area of money. If you know that you need to make sure you find enough to make a regular payment each month, you begin to take notice of how much you have coming in and more importantly, how much is leaving your account each. The knock on effect is that you start to think about what you’re spending more carefully.

2. All non essential purchases are eliminated

When you’re using salary loans to get by, you’re not generally in a position to waste money on frivolous purchases or treats. This isn’t a very nice position to be in but providing you’re careful and do what you can to pay off your debt, it won’t last forever. Learning to live without luxury can be surprisingly rewarding and you’ll enjoy the little extras all the more when you can afford to buy them again. Though nobody is suggesting living a deliberately spartan lifestyle, cutting back on the non-essential items is a good habit to get in to if you want to financially secure.

3. Shopping habits begin to change

When you’re living on a very tight budget or making allowances for a salary loan repayment, you usually start to change the way you shop. Big name brands, convenience food and impulse buys take on a new meaning and you begin to realise that second-hand goods, discounted items or own brand products are perfectly acceptable. Similarly, you start to shop out of necessity, rather than routine. Ideally, you should only use salary loans when you’re certain you can pay them off quickly, but if you do need to cover the high cost of interest, changing shopping habits can be one of the first steps towards financial freedom.

4. Budgeting becomes essential

If you haven’t budgeted before, it can be overwhelming to know where to start but it doesn’t have to be difficult. When you’re paying off salary loans, you need to ensure you’re sticking to a strict budget so that you can ensure you don’t overspend. It’s easier than it sounds once you get into the swing of things and when you do get the loan paid off, you can enjoy a substantial increase in the amount of disposable income you have to play with each month. Prioritising things like food, rent, bills and other essentials is always the best approach, but remember to leave yourself a little something for non-essentials if you can, too.

5. Can stop you borrowing more

Though it isn’t an ideal situation to be in, when you need to find a substantial amount of money to make a repayment each month, it does make you take stock of your finances. Realising that borrowing is not the way to get out of debt can take time for some people but dealing with salary loans can help this to sink in a little quicker. Although they aren’t designed to punitive, this type of loan is very expensive when not used correctly, especially when compared to a personal loan. Once you have got to grips with how to use salary loans effectively, you will generally find that you are less likely to be irresponsible with money in the future.

6. Priorities become a lot clearer

When you’re financially comfortable, it’s easy to get sucked in to a spending cycle that is a little beyond your means. Luxuries and treats become commonplace and eventually you begin to see them as every day essentials. Salary loans make you think a little more carefully about what your financial priorities really are. Though it might not be especially comfortable to live minimally, it does teach you a lot about how to enjoy life without overspending. Taking control of what really matters to you is something you are forced to do when you need to make substantial repayments each month despite this being a challenging experience, it can also teach you a lot, too.

7. Once paid off, they can help you build a better credit rating

Initially, salary loans in the Philippines can be something of a negative when it comes to the quality of your credit score, however, if you manage to repay them in full, this looks great in the eyes of other lenders. Demonstrating that you are capable of earning enough money to pay off high interest loans will help to boost your overall standing with finance providers and lenders in the Philippines. Ultimately, salary loans are short term products and using them responsibly is always advisable, but if you do find yourself in a situation where you’re paying off a lot of interest and manage to recover from this, your credit score will often recover pretty quickly too.


Salary loans are often seen as negative things but providing you use them responsibly and understand their purpose, there’s no reason you can’t benefit from taking one out if you need to. Always use reputable, legally recognised companies and make sure that you read the terms and conditions of anything you sign in full to avoid unwanted problems further down the line.

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