Unpaid Online Loans? Here’s What Happens When You Have Debt in the Philippines

We’ve all faced tough times—job losses, business closures—and sometimes that means turning to online loans to get by.

But missing payments, even due to emergencies or rising costs, can lead to loan defaults. Putting off payments might seem necessary, but it can make your situation even harder!

So, what really happens if you stop paying a loan? Here are some consequences to consider:

I know tons of friends who've struggled with debt, and I always tell them this: loans are borrowed money, plain and simple!

Paying loans on time isn’t just for you—it helps lenders keep lending to others, too. If you delay, though, interest piles up, adding even more debt to your load.

Late payment interest rates are usually 7% to 10%, and missed payments can quickly add up. If your loan defaults, you may be required to pay everything—overdue balance, interest, penalties, and extra fees—in full.

Remember, if late payments continue, your lender may turn your account over to collectors, whose job is to follow up on unpaid debts. It’s best to settle early to avoid their calls!

Here’s the deal with home and car loans: until you’ve fully paid them off, the bank or lender technically owns your house or car. If you miss payments, they can repossess it—even if you’ve invested a lot.

Think about it: your car and house are huge lifetime investments, and losing them over unpaid loans is a big blow.

Banks and lenders follow strict guidelines on overdue (delinquent) loans, often leading to repossession or foreclosure if payments aren’t made. To avoid this, ask yourself before signing, "Can I handle these payments?"

Remember, even secured loans carry risks, so read every detail of the contract before committing. 

Unpaid loans may lead to a ow or bad credit score! Sa finance, ito ang tinitingnan ng lenders sa loan approvals. Mababa ba? Pwede kang ma-disqualify sa future loans.

Kapag ang loan mo ay naging ‘default’ (hindi nabayaran on time), babagsak ang credit score mo, at maaaring ma-reject sa susunod na loans o financial assistance.

Ang late payments ay nire-report ng banks sa Credit Management Association of the Philippines (CMAP), kaya posibleng ma-forfeit ang loan applications mo for five years.

Kung approved ka man kahit may bad credit, expect mas mataas na interest—mas lumalaki ang utang kapag hindi agad nabayaran.

How do you compute or know your credit score?

Pwede mong malaman ang iyong credit score o credit standing by requesting a credit report galing sa CIC o isa sa mga accredited bureaus nito. Nakabase ang credit score mo sa iyong:

1. Payment History – Kung nakakabayad ang borrower on time and up to date.
2. Amount Owed – Kung magkano ang kabuuang hineram na pera ni borrower.
3. Length of Credit History – Kung gaano katagal ang active credit accounts mo at kung ikaw ay nakakabayad sa tamang oras o petsa.
4. New Credit – Ikaw ba ay nagaapply sa mga bagong credit cards or cash loans?
5. Credit Mix – Tinitingnan din ng lenders ang iba’t ibang credit standing mo sa mga banko kung ito ba ay napaninindigang bayaran sa tamang oras.

Government-owned and controlled corporations (GOCC) that provide loans like the Social Security System (SSS) or Government Service Insurance System (GSIS) are also strict with non-payments by deducting balances, penalties, and interests from your claimable benefits. These include your disability benefits and life insurance, as well as your retirement or maternity benefits, which means less help for you and your family during the most important times in your life.

On the other hand, keeping up with your payments for loans from GOCCs puts you in good standing and keeps your benefits safe and secure, while making you eligible for future financial help.

Wag matakot na humingi ng assistance from local banks or lenders regarding your loan! Some financial institutions offer repayment solutions para sa mga customers na nangangailangan ng tulong dahil hirap mabayaran ang unpaid loans.

One reliable loan provider that can help you manage your IOUs and money matters better is Home Credit Philippines.

This financial institution aims to help those Filipinos who want to improve their lives by offering affordable installment plans for their dream products, and later on, provide financial assistance na rin sa mga eligible customers with cash loans. Home Credit also offers other services like Home Credit Card and HCQWARTA to help you with your daily spend na magagamit mo rin sa iba't-ibang merchants or billers.

In case of emergencies, meron ding value-added service si Home Credit na tinatawag na Loan Extra Care to give you flexible payment options.

Learn more about how Home Credit can help you with your money matters by downloading our refreshed Home Credit App on the Google Play Store or App Store now!