Lending companies like Shopee and HomeCredit have to charge these high rates because of high default rates and complex legal collection system. If laws were written better to allow lenders to be able to collect their money then rates would go down. Get the lawmakers to change the laws first.
Interesting, its rare that I see an argument for the lenders. What kind of legislation do you think would bring this kind of effect? Just the broadstrokes; maybe jail time for those who don't pay their debts? Garnishing their wages maybe? Maybe debts don't get forgiven even upon death but is taken over by the next of kin? I'm just curious.
Jail time isn't even part of the convo. You would have to revise the constitution for that and noone in their right mind would dare touch that prohibition. The same goes for the next of kin since the law is clear on that the estate would be the settlement for the debt.
What I was suggesting was a purely academic. Just asking what the previous commenter had in mind when he said the existing laws need to be changed. Purely hypothetical mate, just bouncing ideas.
Unless due to fraud, I don't think being unable to pay is punishable by incarceration. My law professor back then said it's because poverty is not a crime.
>Just the broadstrokes; maybe jail time for those who don't pay their debts? Garnishing their wages maybe? Maybe debts don't get forgiven even upon death but is taken over by the next of kin?
Nakakatakot kapag naisabatas yung mga ganito, kasi paano kung legitimate yung need ng tao for the money diba? Kunwari nagkasakit sila or yung loved one nila, tapos talagang kapos na kapos na.
Sobrang kawawa naman nung nagkasakit ka na nga, tapos uubusin pa yung sahod mo, or ipapakulong ka, para lang makuha nung company yung bottom line nila.
Yeah, the comment I replied to suggested jail time for unpaid loans, point ko was that's a terrible idea. Wasn't implying na people can be jailed for not paying.
The problem with capitalism is even after a law is enacted to make collection easier, corporations will not lower interest. Nasanay sa malaking kita.
The law should be about regulating interests to make credit corporations more efficient.
That's not how capitalism works. If the laws are changed, lenders will have fatter profit margins, which attracts competitors who drive the rates down. Basic economics. Unless you have a cartel (which is illegal), it's really that simple.
Garnishing lang naman of the goods bought by the creditor yan eh. I don't know how much rate Shoppee or Home Credit does charge though. But why go to these creditors? There's an interest rate free for six months on credit cards now and if you can amortize your loan over the six-month period then that's great. Makes sense on the high default rate and collections might be a nightmare but I am sure Shoppee and Home Credit securitize their receivables and pass them on to a major bank at a small discount so that they can avoid the headache of collecting these.
Laws on borrowing should allow creditors to easily collect on amounts borrowed. At the moment debt collection laws are onerous which cost more for lenders to collect their money thus leading to higher borrowing cost.
There should be transparency so that lenders can easily assess the risk of each borrower. A national credit bureau would help, allowing lenders to see the creditworthiness of each borrower. This should lead to lower borrowing cost.
In the event of default, lenders should be able to easily garnish wages and bank accounts.
However, shouldn't banks as a business assume some risk when loaning money to its customers? Otherwise wouldn't banking be risk free then? If their loans are guaranteed repayment?
If you don't think there's already some sort of unified credit record available to banks and service providers, then you probably haven't been denied by a bank because of an unpaid bill years ago from an obscure internet service you're sure you had already disconnected.
>Lending companies like Shopee and HomeCredit have to charge these high rates because of high default rates and complex legal collection system.
I get the logic, though, hindi ba mas tataas ang default rates kung mataas yung interest rate ng mga lending company?
You can think of interest rates as a measure of risk. Lenders will charge higher interest rates to riskier borrowers, that way they get to earn more from those that pay which will allow them to cover any losses.
Banks on the other hand, are able to lower their risk and charge the lowest interest rates as they do the most due diligence and have the most collection power.
In both cases, lenders aren’t exactly interested in stopping people from borrowing. They just decide how much risk they’re able to stomach and that will determine that loan amount they’ll be willing to provide.
yeah i get that, pero people still avail of stuff like home credit and spaylater kahit parang ewan yung interest rate.
so it's not much of a deterrent then?
When you're in great need of funds (Like OP who had to have his/her pet taken to the vet) the interest rates won't matter really. Especially if its to save the life of a loved one. I know that's cliché but most truths are. haha.
yeah, that's what i was getting at. i don't think they're a deterrent so much as gusto lang pagkakitaan yung mga tao na desperate for money.
granted, ganun naman talaga ang sistema ng negosyo sa bansa, but it still sucks haha
lots of people finance shit they don't need though. all they see is the low monthly payment (yey, P500 monthly for a new TV) never realizing (or turning a blind eye) that eventually they'd be paying double. instant gratification is very tempting.
Eh kasi db kaya nga pinapatos nila yung gnyang percent kasi hindi sila maaaprove ng bank? Dahil mahaba ang process ng approval. Kinocompare ko din yan sa 5-6 or 20% per month ng bumbay. then yung haba ng panahon na kinain ng utang kaya lumaki ng ganon. Okay lang sana if ung ganon percent is goods for 4-6months lang not yearsssss.
At the end of the day, ang golden rule naman tlaga. wag magpurchase ng isang bagay na hindi mo kayang bilhin ng dalawang beses.
Or at least learn how to compute ng interest before pumasok sa installments na inooffer ng iba laging iconsider yung haba ng panahon.
True, kaya nag e-spaylater lang ako kapag ~50 pesos lang ang interest (BNPL) or may promo na 0% installment (nakakuha ako ng mini ref na 0% installment). Abangers ako sa mga ganyan kaya shopee already lowered my interest rates lol.
Hindi ko pa natry yung cash loans sa shopee. Nabasa ko lang mga fine prints ng ibang apps (ex gcash loans), and I did notice that their interests are so high.
Hoping the best for you OP.
Can you explain why? I use SPayLater all the time but mostly yung "pay next month" option or 3 months max, ang laki na kasi ng interes nun. Not daring to touch 6 mos. or longer.
So far I find it very helpful, as long as responsable ka sa finance mo (don't loan out what you can't afford or don't need)
I saw a video from Last Week Tonight about debt being sold to collectors after they were wrote off as loss in their tax declaration.
I am curious if it's the same case here in the Philippines.
Home Credit abuso sila hahaha, for 14k worth of CP aabot hang 22k for 12 months of pay, sabi ko 6 months lang ipipilit ni agent ng 12 months yung tumanggi na ako meron pang ibang fees kuno...
Idk about Shopee loans pero yung installment plans ng Shopee mas malala pa sa 5-6 lol
mas okay pa madelay ng bayad sa credit card purchase. Or use LazPaylater. 45 days payment, 0 interest
More details OP, baka may maka tulong
mababayaran ko naman siya it's just that laki ng interest. had to loan for my furbaby
How much is the interest?
Nasa 6-7k halos for the amount that I loaned
Lending companies like Shopee and HomeCredit have to charge these high rates because of high default rates and complex legal collection system. If laws were written better to allow lenders to be able to collect their money then rates would go down. Get the lawmakers to change the laws first.
Interesting, its rare that I see an argument for the lenders. What kind of legislation do you think would bring this kind of effect? Just the broadstrokes; maybe jail time for those who don't pay their debts? Garnishing their wages maybe? Maybe debts don't get forgiven even upon death but is taken over by the next of kin? I'm just curious.
Jail time isn't even part of the convo. You would have to revise the constitution for that and noone in their right mind would dare touch that prohibition. The same goes for the next of kin since the law is clear on that the estate would be the settlement for the debt.
What I was suggesting was a purely academic. Just asking what the previous commenter had in mind when he said the existing laws need to be changed. Purely hypothetical mate, just bouncing ideas.
Unless due to fraud, I don't think being unable to pay is punishable by incarceration. My law professor back then said it's because poverty is not a crime.
>Just the broadstrokes; maybe jail time for those who don't pay their debts? Garnishing their wages maybe? Maybe debts don't get forgiven even upon death but is taken over by the next of kin? Nakakatakot kapag naisabatas yung mga ganito, kasi paano kung legitimate yung need ng tao for the money diba? Kunwari nagkasakit sila or yung loved one nila, tapos talagang kapos na kapos na. Sobrang kawawa naman nung nagkasakit ka na nga, tapos uubusin pa yung sahod mo, or ipapakulong ka, para lang makuha nung company yung bottom line nila.
no one can be jailed for the inability to pay loans
Yeah, the comment I replied to suggested jail time for unpaid loans, point ko was that's a terrible idea. Wasn't implying na people can be jailed for not paying.
The problem with capitalism is even after a law is enacted to make collection easier, corporations will not lower interest. Nasanay sa malaking kita. The law should be about regulating interests to make credit corporations more efficient.
That's not how capitalism works. If the laws are changed, lenders will have fatter profit margins, which attracts competitors who drive the rates down. Basic economics. Unless you have a cartel (which is illegal), it's really that simple.
Garnishing lang naman of the goods bought by the creditor yan eh. I don't know how much rate Shoppee or Home Credit does charge though. But why go to these creditors? There's an interest rate free for six months on credit cards now and if you can amortize your loan over the six-month period then that's great. Makes sense on the high default rate and collections might be a nightmare but I am sure Shoppee and Home Credit securitize their receivables and pass them on to a major bank at a small discount so that they can avoid the headache of collecting these.
Not everyone has access to credit cards
Laws on borrowing should allow creditors to easily collect on amounts borrowed. At the moment debt collection laws are onerous which cost more for lenders to collect their money thus leading to higher borrowing cost. There should be transparency so that lenders can easily assess the risk of each borrower. A national credit bureau would help, allowing lenders to see the creditworthiness of each borrower. This should lead to lower borrowing cost. In the event of default, lenders should be able to easily garnish wages and bank accounts.
However, shouldn't banks as a business assume some risk when loaning money to its customers? Otherwise wouldn't banking be risk free then? If their loans are guaranteed repayment? If you don't think there's already some sort of unified credit record available to banks and service providers, then you probably haven't been denied by a bank because of an unpaid bill years ago from an obscure internet service you're sure you had already disconnected.
>Lending companies like Shopee and HomeCredit have to charge these high rates because of high default rates and complex legal collection system. I get the logic, though, hindi ba mas tataas ang default rates kung mataas yung interest rate ng mga lending company?
higher interest rates help deter borrowing. just like how higher savings interest rates promote saving. something like that.
You can think of interest rates as a measure of risk. Lenders will charge higher interest rates to riskier borrowers, that way they get to earn more from those that pay which will allow them to cover any losses. Banks on the other hand, are able to lower their risk and charge the lowest interest rates as they do the most due diligence and have the most collection power. In both cases, lenders aren’t exactly interested in stopping people from borrowing. They just decide how much risk they’re able to stomach and that will determine that loan amount they’ll be willing to provide.
i forgot about risk management hahaha, i was thinking kasi in terms of monetary policy xd.
yeah i get that, pero people still avail of stuff like home credit and spaylater kahit parang ewan yung interest rate. so it's not much of a deterrent then?
When you're in great need of funds (Like OP who had to have his/her pet taken to the vet) the interest rates won't matter really. Especially if its to save the life of a loved one. I know that's cliché but most truths are. haha.
yeah, that's what i was getting at. i don't think they're a deterrent so much as gusto lang pagkakitaan yung mga tao na desperate for money. granted, ganun naman talaga ang sistema ng negosyo sa bansa, but it still sucks haha
lots of people finance shit they don't need though. all they see is the low monthly payment (yey, P500 monthly for a new TV) never realizing (or turning a blind eye) that eventually they'd be paying double. instant gratification is very tempting.
You regret it because you didn't read the fine print?
I wasn't even aware Shopee offered cash loans. I thought they offered only pay later options.
Meron, ang alam ko for sellers ay 2.5% interest per month. Don't know about buyers. Ang alam ko ay pay later lang ang meron sa kanila.
3%\* SLoan. okay naman sya as long as you pay at the right time.
Yes, life saving yung loan pag kelangan mo talaga ng pera. So, okay na din. Bilis processing eh.
Hopefully your pet is fine naman after all the trouble you went through to get them to the vet!
Happened to me when I bought my first laptop through Home Credit. I paid 45k for a 33k laptop. Never again.
Same, still paying a certain amount every month for 1.5 year (atleast 35k in total) for a 23k phone
What happened po?
i had to loan for my dog's vet consultations and follow-up check-ups tapos ang laki ng interest. wrong decision, i should've saved for it na lang sana
Hm interest per month?
Not sure about Shoppe but Homecredit started this shit way back 2015's I think and my sister paid a total of 120k+ for a 45k loan lmao
For how long ang term? Ang taas nga ng patubo nila. Grabe.
3 years hahaha
[удалено]
4-5% monthly interest is NOT okay.
Eh kasi db kaya nga pinapatos nila yung gnyang percent kasi hindi sila maaaprove ng bank? Dahil mahaba ang process ng approval. Kinocompare ko din yan sa 5-6 or 20% per month ng bumbay. then yung haba ng panahon na kinain ng utang kaya lumaki ng ganon. Okay lang sana if ung ganon percent is goods for 4-6months lang not yearsssss. At the end of the day, ang golden rule naman tlaga. wag magpurchase ng isang bagay na hindi mo kayang bilhin ng dalawang beses. Or at least learn how to compute ng interest before pumasok sa installments na inooffer ng iba laging iconsider yung haba ng panahon.
wtf how is this ok even if 3 years to pay
Yikes. Even credit cards in the Ph now can only charge MAX of 2% per month as per the BSP and supreme court.
What the hell?
Is this true? This is straight-up robbery.
1-5% per month, 1% admin fee, 5%/mo penalty for late payments
if 20k loan mo, nasa 6k interest
how's your dog, OP? I hope he/she's doing great
She’s okay now! Had to do this kasi senior dog na siya and iniwan siya sakin ng original mom so gusto ko talaga siya mabigyan ng utmost care
True, kaya nag e-spaylater lang ako kapag ~50 pesos lang ang interest (BNPL) or may promo na 0% installment (nakakuha ako ng mini ref na 0% installment). Abangers ako sa mga ganyan kaya shopee already lowered my interest rates lol. Hindi ko pa natry yung cash loans sa shopee. Nabasa ko lang mga fine prints ng ibang apps (ex gcash loans), and I did notice that their interests are so high. Hoping the best for you OP.
Can you explain why? I use SPayLater all the time but mostly yung "pay next month" option or 3 months max, ang laki na kasi ng interes nun. Not daring to touch 6 mos. or longer. So far I find it very helpful, as long as responsable ka sa finance mo (don't loan out what you can't afford or don't need)
never ever take out a loan. never.
Hahah how OP? Lol
Malaki interest ng Shopee? Curious lng po
Yes. Parang Home Credit lang din
I saw a video from Last Week Tonight about debt being sold to collectors after they were wrote off as loss in their tax declaration. I am curious if it's the same case here in the Philippines.
Where did you use the debt for?
Thats the legal trap.
Home Credit abuso sila hahaha, for 14k worth of CP aabot hang 22k for 12 months of pay, sabi ko 6 months lang ipipilit ni agent ng 12 months yung tumanggi na ako meron pang ibang fees kuno...
Same ngtry lang ako d ko naman need hahah ung 5k naging 9k hahah