The cost of living paycheck-to-paycheck and acquiring debt can be haunting. Aside from those “itawa na lang natin” moments during petsa de peligro aka those days right before payday, a certain lifestyle can cause various insecurities. Not only do you feel like you’re doing everything wrong, there’s also the fear that at any given moment, an emergency can occur, and you won’t be financially capable of handling it.
So when I found myself in that scenario, I ended up getting a bank loan. Was it a financial trap like some people say it is? Did it create more problems after serving as a quick fix? Not really.
Here’s what happened:
I didn’t do it on a whim.
Most people only ever consider going to the “bank” they’ve relied on since infancy—the parents. Some have solid friends or a partner who’s always dependable, even during a financial crisis. But if you have none of those, or you simply choose to rely only on yourself, you might walk the same path as I did.
TBH, I only seriously considered it when I got a call from my credit card company saying I have a special “credit line” or a type of personal loan they offer to loyal cardholders. While talking to a representative, I asked for the exact amount I could get as a loan and details about the installment plan, as well as found out how much I had to repay.
I considered everything the telemarketing agent told me, jotted down notes, and asked her to call me back after a day of ruminating. I didn’t want to accept or decline right away. The next day, I was set on taking the offer because I needed money for a two-month unpaid internship abroad. This crazy Miss Independent didn’t want to be a burden to her parents, but she didn’t have savings, either. The bank loan was the best option for me.
I became a math whiz.
I put my algebra skills to the test, and I’m glad I had the patience to plot all those variable scenarios in equations. In my case, taking out a loan of more than P50,000 had a lower interest rate, which essentially meant that it was more sulit to borrow more, so I did. Additionally, I calculated that while repaying the loan in 18 months was more convenient, it also meant having to pay more interest; I ended up choosing the year-long payment plan. (Tip: If the amount you need to pay monthly in just a year isn’t much different from the longer term and your income can support it, choose the 12-month term.)
I got a checkbook and crossed it off my ~adulting~ list.
I needed to submit the standard requirements of bank loans—valid IDs and an ITR or payslips—but the one requirement that I didn’t have readily available was a checkbook. The movies I watched when I was a child made it seem like only rich people had those pads that dispensed thousands or millions at once. But then, I found out that it’s just like opening a savings account. The application and approval process was just a bit longer since it was subject to more scrutiny, which is why I felt like a legit adult after getting mine. Yay, me!
After I got the money, I felt rich, but also paranoid.
Once the brief back-and-forth with the agent was over, I was given the go signal to claim my money. When I got the loan’s proceeds, it was the first time I ever held so many P1,000-peso bills. I just kept thinking, I’d probably die if someone tried to rob me right now. I deposited the money into my savings account STAT.
I finally felt at ease.
I had money! All of my worries about covering my trip’s expenses disappeared! But, naturally, I also thought about all the ways I could spend that money. I could buy clothes. I could pay for a vacation or two. I could put a down payment on a car! The struggle to resist temptations was very real.
I also became anal about payments.
Before my trip to Korea, I made arrangements to pay for my bills on time during those two months, and that my income after the trip could satisfy the debt. I also estimated how much my living expenses would be.
I made a bills tracker on an Excel sheet because I knew I needed to be organized. I took note of all the important dates—like all the due dates of my other bills. I kept saying to myself, “Kaya ko ba 'to?!”
(Bonus hack: If you actively use credit cards like me and pay on time, track the dates when your cards get renewed, and ask the banks to waive your annual fees. They’re usually willing to give it if you have a clean record.)
I worked hard to earn more.
At first, in an effort to be more frugal, I deprived myself to save more. For instance, in Korea, convenience store kimbaps and burgers were LYF! However, being too matipid (Read: kuripot) backfires like a crash diet. I couldn’t really save a lot since I ended up “treating myself” by splurging after periods of deprivation.
So I did something to offset those expenses: I found more side hustles. To get returns with virtually no risk and increase your income, find freelance or part-time gigs that require the stuff you can freely give—your time, effort, and talent. In the words of the wise RiRi, “work, work, work, work, work."
I lived my life with no regrets.
I look back and realize I really couldn’t have survived two months in a First World country without the loan (because a Third World country paycheck combined with an awful tendency to splurge on food and travel tickets left me with zero savings). I had enough for daily necessities, and I even had a little extra for some shopping. With diligent research on the free things I could do that only required money for transpo and food, I was able to explore the beautiful country, too.
For others, the money from a bank loan could be used to pay off tuition fees or hospital bills, consolidate debt (without accumulating more, of course), or maybe renovate a beat-up house. As long as you don’t bite off more than you can chew, and you responsibly pay off the loan, getting one can be worth it.
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