How Drip Loans Work

We have all at some point heard about the “gota a gota” or commonly called “pagadiario” loan, and you have probably thought about applying for one.

Before making this decision, it is very important that you know what these loans are and how they can affect your finances.

What are “drop loans”?

These are informal loans offered by private individuals, which provide the person making the request with a certain amount of money to cover an urgent consumption need. This type of loan does not require any prior credit analysis by the lender.

Drop-by-drop loans are used very frequently in Colombia, since they normally lend small amounts of money, which are collected in periods of less than one month, thus alleviating the immediate needs of the person requesting the credit.

These loans are not supervised by a state supervisory entity and depend exclusively on the negotiation between the lender and its client.

How do the drop loans work?

According to a report published by, the conditions of the loans they apply for are:

  • Amounts less than $1,000,000
  • Daily, weekly or biweekly payments.
  • Terms from 1 to 5 months.
  • The money is used to pay debts or buy clothes.

Most of them are people between 36 and 45 years old, of stratum one, separated or in a free union, and who do not have a credit card.

What are the risks of these informal loans?

What is most attractive about these loans is their immediacy, i.e., getting the money the same day, since it is offered without any paperwork.

It is necessary to consider the following risks:

  • Interest rates of 20, 30 and up to 40% per month, a percentage that is clearly a scam; if the interest is given daily, at the end of the month it turns out to be higher. Learn more about the usury rate established by the Financial Superintendence from
  • In the case of payment delays, intimidations by telephone or in person can lead to physical abuse, damage to property and even fatal consequences.
  • Psychological effects linked to the strong pressure on the person to pay on time, leading him/her to take out more loans to alleviate the first one and paying much more than what he/she initially obtained.

Do you think you need it? Here are some alternatives

We recommend you to think carefully about whether you really need a drop credit and consider the following alternatives:

Banks: Most banks are offering credits of low amounts with disbursements in a few days and at an acceptable interest rate, which is a good alternative as financial relief for your needs.

Fintechs: If banks are not your thing, these totally technological financial services companies offer loans easily and mostly digitally, fast and totally legal. There are many places that offer you less than $1,000,000 and others where you can apply for loans with vehicle collateral for higher amounts.

Friends, family and people you trust: Talk to the people closest to you, it is possible that people who know you, can get you out of a financial trouble without having the problem of a drop by drop or the paperwork of any entity.