Illegal loan apps are becoming a major issue in the Philippines. Many individuals have been scammed out of their money, and some have even been abducted and tortured. If you’re thinking about getting a loan in the Philippines, do your homework and only work with reputed lenders.
The Problem of Illegal Loans in the Philippines
This issue has gained prominence in recent years as a result of the growing number of borrowers who have been scammed or taken advantage of by unscrupulous lenders. Illegal loan apps, often known as “five-six” loans, are payday loans with exceptionally high-interest rates, hidden fees, and other exploitative activities.
These illegal loans are available on digital and physical platforms, and the lenders mainly target persons with poor credit records. The loans are sometimes marketed as a fast answer for financial troubles, but they may swiftly spiral into insurmountable debt and financial devastation.
As a result, individuals must be informed of the dangers of illegal loans in the Philippines and take precautions to protect themselves. The most crucial step individuals can take is to educate themselves on the risks of illegal lending apps in the Philippines and be aware of predatory lenders’ warning signals.
Lenders who need upfront fees, lenders who promise rapid and simple access to cash, lenders who require personal information, such as bank account numbers, and lenders who charge extremely high-interest rates are some of the most prominent warning signals.
It is also critical to do due diligence on lenders before entering into any loan deal to verify they are reputable and trustworthy. There is a long list of illegal online lending apps; you can find the list below.
Authorities That Review the Online Loan Apps’ Legality
The lender must first apply to the Department of Trade and Industry (DTI) to begin the review process. The DTI will analyze the application and assess if it is lawful and in accordance with Philippine government requirements.
Following this evaluation, the DTI will analyze and approve the loan app before customers may use it. Following the approval of the loan application, the lender must register with the Bangko Sentral ng Pilipinas (BSP). This is mandated under the Philippine Consumer Protection Law.
After registering with the BSP, the lender must also file a report with the Philippine Securities and Exchange Commission. This report will include details on the lender’s policies, practices, and financial soundness.
The Philippine Securities and Exchange Commission will examine the report to see whether the lending app conforms with current rules and regulations. Once the information has been approved, the lender will be able to operate in the Philippines.
It is vital to remember that the review process for online loan applications in the Philippines may be time-consuming and long. As a result, prospective borrowers must research and verify that any loan app they use is in accordance with Philippine laws and regulations. This ensures their financial security and protects them from becoming engaged in any unlawful lending activity.
Why Have This App Can Become Illegal
The fundamental reason loan apps in the Philippines may become unlawful is that the government does not regulate them and does not offer enough consumer protection. Personal information and data collected by these applications may be used to perpetrate identity theft and other financial crimes.
Furthermore, they may demand excessive interest rates, leading to unmanageable debt. Another reason loan apps may become prohibited in the Philippines is because they may be used to support usury.
The practice of charging excessively high-interest rates and fees is known as usury. This activity is illegal in the Philippines, and individuals who engage in it suffer harsh consequences if detected.
Illegal Lending Apps in the Philippines
The BSP has directed banks and other financial institutions to end current agreements with these unlawful lending applications and immediately stop all transactions with them. They have also asked the public to stay away from using these applications and to contact them if they have any concerns.
List of Illegal Online Lending Apps Philippines
- CashWill
- PesoBee
- RushLoan
- SkyMart
- SpendCash
- Tapa
- WithU
- Peso T-Safe Online Cash
These applications are aimed at those who cannot afford to borrow from banks or other financial organizations because of a low credit history. They are capitalizing on this by providing quick access to high-interest loans, with borrowers expected to repay quickly. This risky activity may lead to debt traps, loan sharking, and other predatory lending activities, creating financial difficulty for debtors.
Illegal Online Money Lending Apps and Applications
CashWill is one of the Philippines’ most popular illegal online lending applications. CashWill is a smartphone app that gives customers one-click access to modest, short-term loans. While CashWill may seem easy, it has been tied to multiple incidences of unlawful lending and accused of charging exorbitant interest rates.
WithU is another popular app on the SEC list of illegal online lending apps that allows users to request loans online and have the money sent to their bank accounts in a matter of minutes. However, it has also been connected to unlawful lending practices and excessive interest rates, and the Philippine National Police has advised residents not to use the app.
SpendCash is yet another illegal app loan that has caught the attention of the Philippine National Police. It is an app that enables users to borrow money fast and easily. However, the app has been tied to many illegal loan instances, and users have complained about high-interest rates.
MoneyCat, Easy Credit, and PayDay lending are just a few illegal lending applications in the Philippines. These applications provide fast and cheap access to loans but also carry substantial risks. They are associated with outrageous interest rates and incidences of illegal lending, and users should proceed with care while dealing with them.
List of Revoked Certificates of Authority to Operate As a Lending Company (Secondary Licences)
| Name of Lending Company | Date of Revocation |
| Flying Bear Lending Corp. Order of Finality Order of Revocation | 21-Jul-22 08-Jun-22 |
| Cashtrees Lending Corp. Order of Finality Order of Revocation | 06-Apr-22 16-Mar-22 |
| Fynamics Lending Inc. Order of Finality Order of Revocation | 05-Jan-2022 06-Dec-21 |
| Familyhan Credit Corporation Decision of the Commission En Banc Order of Revocation | 02-Nov-21 13-Apr-21 |
| KINGABC LENDING CORPORATION Order of Finality Resolution Order of Revocation | 20-Sep-21 02-Aug-21 07-Jun-21 |
| CGFD Order: 18 s.2021 | 09-Mar-21 |
| 163 LENDING CORP. | 09-Mar-21 |
| BARAKAT LENDING INVESTOR CORPORATION | 09-Mar-21 |
| BASIC RESOURCES MICRO-LENDING CORPORATION | 09-Mar-21 |
| BASSIL & HASS LENDING CORPORATION | 09-Mar-21 |
| BYMONEY LENDING CORP. | 09-Mar-21 |
| DD CREDIT AND LENDING INVESTOR SERVICES, INC. | 09-Mar-21 |
| DIAMONDSTAR LENDING & CREDIT CORP. | 09-Mar-21 |
| DRAGON ORAGIF LENDING CORP. | 09-Mar-21 |
| DRAGOON LENDING CORP. | 09-Mar-21 |
| GINTONG BUKAS LENDING CORPORATION | 09-Mar-21 |
| GOLDEN ACE LENDING CORPORATION | 09-Mar-21 |
| GOLDEN SCION LENDING INVESTOR CORP. | 09-Mar-21 |
| GREAT RIVER LENDING INVESTOR GROUP, INC. | 09-Mar-21 |
| GREEN HEIGHTS CREDIT AND LOAN, INC. | 09-Mar-21 |
| GREENFUND CREDIT CORPORATION | 09-Mar-21 |
| IHF 115 LENDING CORPORATION | 09-Mar-21 |
| J-TEAM LENDING ENTERPRISES CORP. | 09-Mar-21 |
| JJ MONEYLINK INC. | 09-Mar-21 |
| JRP 2008 CREDIT CORPORATION | 09-Mar-21 |
| JULET MICRO EXPRESS CREDIT CORPORATION | 09-Mar-21 |
| KWARTA LINE LENDING INC. | 09-Mar-21 |
| LADY ANNE LENDING CORPORATION | 09-Mar-21 |
| LAIPOWER LENDING CORP. | 09-Mar-21 |
| LOTUS-4 GROUP LENDING CORP. | 09-Mar-21 |
| LUDYLAI LENDING CORP. | 09-Mar-21 |
| QUARIES LENDING CO., INC. | 09-Mar-21 |
| UNLAD PILIPINO CREDIT & LOANS CORP. | 09-Mar-21 |
| VALENZUELA LENDING INVESTOR INC. | 09-Mar-21 |
| UNIPESO LENDING COMPANY INC. Order of Finality Order of Revocation | 09-Feb-21 03-Dec-20 |
| SUPER CASH LENDING CORP. Order of Finality Order of Revocation | 07-Jan-21 11-Nov-20 |
| Z.C. BUEN MANO LENDING CORPORATION | 16-Jul-19 |
List of Suspended Certificates of Authority to Operate As a Lending Company (Secondary Licences)
| Name of Lending Company | Date of Revocation |
| UNIRAPID LENDING TECHNOLOGY INC. Order of Finality Order of Suspension | 21-Feb-21 03-Dec-20 |
| CGFD Order: 122 s.2020 | 23-Oct-20 |
| 163 LENDING CORP. | 23-Oct-20 |
| BARAKAT LENDING INVESTOR CORPORATION | 23-Oct-20 |
| BASIC RESOURCES MICRO-LENDING CORPORATION | 23-Oct-20 |
| BASSIL & HASS LENDING CORPORATION | 23-Oct-20 |
| BYMONEY LENDING CORP. | 23-Oct-20 |
| DD CREDIT AND LENDIGN INVESTORS SERVICES, INC. | 23-Oct-20 |
| DIAMONDSTAR LENDING & CREDIT CORP. | 23-Oct-20 |
| DRAGON ORAGIF LENDING CORP. | 23-Oct-20 |
| DRAGOON LENDING CORP. | 23-Oct-20 |
| GINTONG BUKAS LENDING CORPORATION | 23-Oct-20 |
| GOLDEN ACE LENDING CORPORATION | 23-Oct-20 |
| GOLDEN SCION LENDING CORPORATION | 23-Oct-20 |
| GREAT RIVER LENDING INVESTOR GROUP, INC | 23-Oct-20 |
| GREEN HEIGHTS CREDIT AND LOAN INC | 23-Oct-20 |
| GREENFUND CREDIT CORPORATION | 23-Oct-20 |
| IHF 115 LENDING CORPORATION | 23-Oct-20 |
| J-TEAM LENDING ENTERPRISES CORP. | 23-Oct-20 |
| JJ MONKEYLINK INC. | 23-Oct-20 |
| JRP 2008 CREDIT CORPORATION | 23-Oct-20 |
| JULET MICRO EXPRESS CREDIT INFORMATION | 23-Oct-20 |
| KWARTA LINE LENDING INC. | 23-Oct-20 |
| LADY ANNE LENDING CORPORATION | 23-Oct-20 |
| LAIPOWER LENDING CORP. | 23-Oct-20 |
| LOTUS-4 GROUP LENDING CORP. | 23-Oct-20 |
| LUDYLAI LENDING CORP. | 23-Oct-20 |
| QUARIES LENDING CO., INC. | 23-Oct-20 |
| UNLAD PILIPINO CREDIT & LOANS CORP. | 23-Oct-20 |
| VALENZUELA LENDING INVESTOR INC. | 23-Oct-20 |
Final Thoughts
Illegal loan apps in the Philippines are a big source of worry for the government, as they trap individuals in debt and create a black market for loans and credit services. Governments, regulators, and financial firms must collaborate to guarantee that these applications’ users are safeguarded and that these apps are shut down.