The 7 Most Beginner-Friendly Solutions for Borrowing Money

We can all use a financial boost sometimes. Whether it’s immediate relief for an emergency or additional funding for a big purchase, many of us have been in situations where even just a bit of financial assistance can feel life-changing. And when caught in these situations, an obvious recourse is to borrow money.

For those who are new to it, borrowing money may seem like a scary prospect. You might wonder which options are safe, with terms that are easy to understand and won’t trap you in debt. Fortunately, there are borrowing solutions designed specifically for beginners who may not have strong credit histories yet or an extensive experience with financial products.

To that end, let’s explore several beginner-friendly ways to borrow money that are practical and low-risk:

1) Borrowing from People You Trust

One of the most accessible ways to borrow money is by asking someone you already have a relationship with, such as a friend or a family member. Borrowing from people you know means not having to deal with traditional credit checks and formal application processes, as well as minimal to no interest charges. This option is a particularly helpful choice for people who have no credit history or have limited income, as personal relationships can offer more flexibility than financial institutions.

However, borrowing from someone you know also calls for mutual respect and clear communication. For one, it’s crucial to set a repayment timeline that you both agree on. You should also consider putting the agreement in writing to help prevent misunderstandings.

Be mindful that while this kind of borrowing can seem straightforward and accessible, it also carries the risk of damaging your personal relationships when not treated seriously and responsibly. As such, make it a point to pay your debts on time to avoid unnecessarily straining your relationships.

2) Digital Bank Loans with Flexible Approval

Digital banks and online lending platforms have made it easier than ever to apply for personal loans or virtual credit lines without visiting a physical bank. Platforms like Maya offer simple application processes and quick approvals, letting you borrow money online through programs like Maya Personal Loan and Maya Easy Credit hassle-free. Some lenders even cater specifically to people with limited credit history, with minimal documentary requirements. Maya Easy Credit, a virtual credit line that allows you to borrow up to PHP 30,000 and repay within 30 days with a minimal service fee, promises just that.

These loans can be used for a wide range of purposes, like covering emergency expenses or financing personal projects. In addition, since approval is often based on income and employment history, rather than just credit scores, they are accessible to many beginners. Just make sure to borrow from a trustworthy lender and read all terms carefully to avoid hidden fees.

3) Credit Builder Loans

Credit builder loans are designed for people who are new to credit or have little borrowing experience. With a credit builder loan, you don’t receive the money you borrow upfront. Instead, the funds are held in a secure account while you make monthly payments. Once the loan is fully paid off, you receive the total amount you borrowed.

These loans are helpful for beginners since they help you build a positive credit history while also encouraging a new borrower to save money. And because there’s no risk to the lender, approval is usually easy, even without the borrower having an extensive credit history. Just remember that when applying for a credit builder loan, you have to ensure that the lender reports your payments to credit bureaus, all so that your credit score improves over time.

4) Secured Personal Loans

Secured personal loans require borrowers to put up a collateral, which is something of value such as a savings account or a vehicle. Because the lender has a way to recover the money if you don’t repay, the qualification requirements are often easier to meet than those for unsecured loans.

This kind of loan can be a helpful choice if you’re trying to borrow a moderate amount and have something to use as collateral. But it’s important to understand the risk: if you fail to repay, the lender has the right to take the asset you pledged. Considering these terms, you should borrow only what you can reasonably pay back and think about whether you’re comfortable risking the item you’ll use as collateral.

5) Government-Backed Emergency Loans

In the Philippines, the Social Security System (SSS) offers salary loans and calamity loans to qualified members. A salary loan from the SSS provides short-term financial relief based on a member’s contributions and salary credits. Furthermore, this loan is typically repaid through monthly deductions and carries more favorable terms than most informal or high-interest lending options.

Meanwhile, SSS calamity loans are offered when a government-declared disaster affects specific areas. These loans are designed to support recovery efforts and usually come with relaxed requirements and extended repayment periods. For SSS members, both loan types present accessible and low-risk borrowing solutions during financial emergencies.

6) Low-Interest Introductory Credit Cards

Beginners can also take advantage of credit cards that offer introductory periods with very low or even zero interest on new purchases. These can serve as a convenient short-term borrowing method if used carefully. If you pay off the balance before the introductory period ends, you won’t owe any interest on what you borrowed.

This approach is best suited for planned purchases that you know you can repay soon. But it’s essential to understand the card’s terms before using it. Take note that the interest rate usually increases significantly once the promotional period ends, so make sure you time your purchases accordingly. Likewise, missing payments can result in penalty rates that can cost you more than you anticipated. Hence, this option should be used only when you’re confident in your repayment plan and budget.

7) Buy Now, Pay Later Services

Buy now, pay later services allow you to split the cost of a purchase into smaller payments over time, with some offering no interest depending on their partner merchant’s terms. These services are popular for online shopping and can help with short-term financial gaps without requiring a credit check.

While the structure seems simple, it’s still important to read the terms carefully. Some services charge late fees, which can lead to additional charges. As such, beginners should treat these services like any other borrowing method and only use them for necessary purchases while ensuring each payment fits comfortably within the allotted budget.

Ultimately, while borrowing money can provide quick aid from financial stress, it also comes with certain responsibilities. As a beginner, this might seem scary, but taking out a loan or obtaining credit shouldn’t cause added pressure if you consider your options wisely and examine their terms carefully. These solutions are meant not only to provide financial relief or support in times of need, but also help you build strong habits that contribute to your confidence and financial stability in the long run.