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Since the spread of Covid 19, many people’s personal finance has been severely affected. The economic impact of the global pandemic has already seen unprecedented changes in the value of the stock market and many people have been made redundant as a result of businesses being forced to closed. In situations like this, financial worries can make life feel extremely difficult but there are potential solutions that can help you to make ends meet. In this article, we discuss how you can use personal loans for emergency situations to help you manage the basic cost of living.

Choosing a Loan Amount

This is the first step and should be something you spend a little time on in order to make sure you are borrowing the right amount. Try to project how long you foresee the crisis or emergency period lasting and base the amount you think you will need on this. For example, if you are in a part of the world where lockdown has been enforced for a minimum period of 2 months, a good guideline would be two months’ worth of your salary. We would advise against borrowing too much and advise that you try to find out as much as you can about your existing employment before you make a final decision.

Organising repayments

At this point, many loan companies are offering repayment holidays, lower lending rates and delayed charges, but this will not always be the case. When arranging to take out a personal loan, it is important to understand you are signing up to a long-term commitment that will require you to find enough money to make the repayments you owe every month. Have a plan to use some of your income to cover the cost of the loan before you start paying for anything else. Obviously rent, food and other essentials must come first, but loan repayments should also be as a non-negotiable expenditure. In the Philippines, the cost of living is generally much cheaper than in other parts of the world, so cutting back on luxuries and living a relatively frugal lifestyle is often easier than it is in other countries.

Prioritizing Your Funds

Money management is a key skill in the modern world and making sure that you plan how to spend your personal loan is an essential step in the borrowing process. It makes sense to allocate fixed amounts for different needs in order to make sure that you use your loan in the most effective way. In crisis or emergency situations, things like food, medicines, clothing and fuel are the most important consideration, so ensure that you take care of these things first, before treating yourself to any luxuries or non-essential purchases. Everybody’s priorities will vary, depending on their circumstances. Families are likely to need more money for fuel and food, whereas a single person or a couple may want to consider using some of the loan for things to boost morale while the crisis is underway. Subscriptions to streaming services, games consoles and other entertainment can bring a great deal of comfort, especially in a lockdown situation.

Making Your Loan Last

If, like many people across the world, you have found yourself in an uncertain situation in terms of ongoing employment, it makes sense to try and make your personal loan last as long as possible. Here are a few tips on how you can do this:

Economise first

By this, we mean take a look at how much you’re spending on different things each month. Though it is never a pleasurable experience to give up some of the things you love, doing so can often make the difference between being able to live comfortably and running up more than debt than you can afford to pay. Buying own brand supermarket items, second-hand goods and cheaper alternatives will save you more money than you might expect. If you can manage to do this and make it a habit, you will definitely get a lot more out of your loan over time.

Don’t Spend Without Thinking

This can be more difficult than it might seem, especially in a world of contactless payments and online transactions, but mindful spending is one of the keys to using a personal loan effectively in a time of crisis. Keep track of every purchase you make by using your banking app or simple spreadsheets. If technology is not your forte, simply making a note of your purchases by hand is a good approach. When you have established this habit, you will be able to make relatively accurate predictions in terms of how much you are likely to need to live for the next few months. Emergency situations such as the Covid 19 outbreak can be unpredictable but early indications show that lockdown periods are lasting for months, rather than years. This means that even if you do have to make some sacrifices and live on the basics for a while, you can look forward to things returning to normal sooner rather than later.


Though saving may be the furthest thing from people’s minds during emergencies, putting some of your loan into a savings account is probably the most effective way of making it last as long as possible. Though you will obviously need to make sure you have covered the cost of everything you need on a day to day basis for the foreseeable future, having a small chunk of cash that you can access if you need to can provide a sense of comfort and stability. Especially if you are faced with things like unexpected medical bills or other expenses that you can’t account for. It can also be helpful for making loan repayments in periods of unemployment or hardship. Though this should really be a last resort, it is a preferable alternative to defaulting on your repayments and incurring penalty charges from your creditors.

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