Loans can work against you instead of for you if you’re not careful. It’s easier to rack up debts if you aren’t financially responsible.
Digitalization has made it easier to release money at any time or to any location. While it can be liberating to have all that access, there are a few habits you should keep in mind:
1. The PoT (Pay on Time) Principle
One truth about loans is that they must be repaid on time. Late payments will not only mean you’ll incur penalties, but they also will reflect badly on your credit score and adversely affect your future finances. For example, credit scores show how often you pay on time. The more punctually you pay, the higher your credit score is. Lenders readily lend to borrowers with good credit scores.
Tala makes it easier for borrowers to repay by offering flexible payment options. Tala’s Loans Your Way was made to allow customers to choose their repayment date to better align it to their income cycles.
2. Stop the on-a-whim purchases
One kind of loan that can be hard to pay is when it’s made on a whim. If a loan is made in the heat of the moment, it can result in buyer’s remorse if you’re not careful. Always check if you have enough funds to pay for this loan. Tala’s microloans are designed to be affordable and are not intimidating to borrowers.
3. Track your expenses
Trying to remember what you’ve spent at the end of the month can be difficult. But when you have a loan to repay, it’s a must. Making a list of the loans you’ve borrowed, along with all the rest of your expenses can keep you on track. It will be a guide for you as to when you should borrow again. Tala’s app helps you keep track of the microloans you’ve borrowed all on your smartphone.
4. Save up
No matter how hard it seems at the moment, learn to save. Start with a hundred pesos every day and then increase the amount slowly. The amount that financial coaches usually advise is 10% of your total income every month. For example, if you are earning P40,000 a month, then make it a goal to save P4,000 monthly.
Now while borrowers normally don’t save from their loan, it would be smart to optimize it. Maximize every peso. See if you can retain a small amount to save after using up the loan for its original purpose.
5. Comb through the T&C
One habit you really have to practice is reading the fine print in your loan agreement. Unscrupulous actors may try to swindle you, or you may find out too late what the consequences of the terms are. Keep an eye out for the interest rates, payment dates, and any hidden fees you might not have noticed.
Tala is very transparent. It has no surprise fees and is compliant with the Truth in Lending Act (Republic Act No. 3765). Consider it a guide that makes loans a tool for empowerment, not a burden.
If you keep spending smart and wisely managing your loans, it will make your financial future stronger. Start your journey into financial freedom: https://tala.ph/borrow/
