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For people struggling with debt in the Philippines, salary loans can be something of a lifeline, but using them too much can be dangerous. Responsible borrowing is a way of managing essential expenses but unfortunately, some customers find themselves locked into a vicious cycle, which makes their debt worse over time. Here’s Asteria’s guide on how to break the salary loan cycle.

Identify and eliminate all non-essential spending

When you’re paying off high interest debt, you need to understand that all non-essential purchases and expenditures need to be eliminated. This isn’t a permanent arrangement, which is important to remember when you’re making sacrifices, but it will allow you to funnel all of your spare money in to reducing the overall amount you owe. Take a look at your bank statements and look at where you’re spending money and be as honest as possible with yourself about what you can potentially sacrifice. This could be a streaming service subscription, a gym membership, expensive food and drink or all of the above. Be realistic with yourself at all times. If you don’t need it to survive, it isn’t really an essential.

Stop Borrowing

This can be much easier said than done but the simplest way to avoid getting stuck in a cycle of payday loans is to stop borrowing until you have regained some sense of financial stability. Resist the urge to spend on credit cards or take out further loans, even if you feel as if you are simply living to work. It will not last forever and though periods like this are extremely challenging for everybody involved, once they are over, you will appreciate having a little disposable income a lot more.

Learn to Save

Even a small amount each month can make a difference to your life in the long run. You won’t see results instantly, but over time, you will begin to reap the benefits. Using savings to pay for treats or even emergency purchases is generally a far better option than using payday loans, especially if you’re already in debt. Apps and online account management software can even help you do this automatically, so it doesn’t always have to be a conscious decision. If you know you have a propensity towards overspending, take advantage of this technology to prevent getting stuck in the salary loan cycle.

Secure a second income

This may be a temporary measure or something you want to maintain on a more permanent basis, but it is one of the best ways to avoid getting trapped in the payday loan cycle. Finding a second job in the evenings or starting an online enterprise can be a reliable means of generating enough money to prevent you from falling back into the problems that come with excessive borrowing and debt. Ideally, whatever you decide to do in order to generate more money, it should fit around the rest of your life and your commitments without causing you too much extra stress.

Sell Unwanted Items

If you have old, unused electronics, furniture or clothing, consider selling it online to make up any shortfall in payments. This will prevent you from borrowing more and will also give you more space. Decluttering and living a more minimal lifestyle is becoming more popular across the world and the Philippines is no exception. One of the reasons many people get caught up in a salary loan cycle is that they place too much emphasis on buying things they don’t really need. Though financial hardship is always unpleasant, it can also be an opportunity for growth and development in some ways. Decluttering your home and selling what you don’t need can be one of the most positive steps you can make.

Borrow from Family and Friends

This should really be a last resort and is an option that’s only available to people with very loving and financially stable friends and family, however, it can be a much better alternative than using another high interest loan to try and make ends meet. Ideally, this option is a one-off instance, otherwise you may find that your loved ones begin to lose patience with you and could refuse to help you out again in the future.

Learn to budget and stick to your limits

Budgeting takes practice, but it can be done by most people with a regular income. Drawing up a food shopping list in advance, planning social events in plenty of time and making sure you book travel tickets as far ahead as you can will make a huge difference to your overall spending. Spreadsheets can be a good option but there also apps that can help you to separate your spending into different sectors so in theory, you should never run out of cash unless you go over your budget.

Only Ever Borrow When You Have No Other Alternatives

Salary Loans in the Philippines can be a great way to ensure you can meet all of your expenses in times of financial crisis, but they are really there to be used as a last resort. Some people end up falling into debt because they decide to take out a salary loan to pay for something nonessential. Once this purchase is made, it can take a long time to pay off both the interest and the amount of the product itself. Always resist the temptation of using short term lending to pay for things you can save up for.


Salary loans are not necessarily a bad idea, but it is absolutely essential that you understand how they should be used before you take one out. Avoid the cycle of constant borrowing by following the steps we have set out above and try to be as strict as you can when it comes to sticking to your budget. Ideally, reduce all spending to an absolute minimum until you are back on the straight and narrow. Most debt can be avoided, providing we think carefully before deciding to borrow what we can’t afford to repay comfortably.

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