Loan Options Available For OFWs

Here’s a sad reality: not everyone is privileged to belong to the upper 1 percent of the society. Most of us need to work hard to be able to buy what we need. Some even have to seek greener pastures and work overseas just to be able to provide a better and more secured future for the family.

In case you need purchase high-value items like a car or a house, or you’re looking for capital to fund your start-up, you end up borrowing money from banks or other private lenders like Balikbayad.

Speaking of loans, here are your options that are specifically designed for Modern Day Heroes like you:

If You Want To Start A Business –

OWWA Loan is recommended. In partnership with Landbank, the purpose of this type of loan is to encourage OFWs to put up their own business through the Enterprise Development and Loan Program.

Unlike other types of business loan, EDLP specifically caters to OFWs where you can borrow from P100,000 to P2 million with annual fixed interest rate of 7.5 percent. More importantly, you are encouraged to attend the entrepreneurial development training wherein you will be given information on how to run a business as well as how to keep it sustainable. Don’t worry because this is free.

If you prefer starting small, then OWWA Reintegration Program could be the right fit. It is open to repatriated and displaced OFWs wherein you will be given livelihood assistance amounting to as much as P10,000. This is enough to help you start a small business.

Balikbayad also offers business loans for OFWs to help you get a fresh start without leaving the country. Simply fill out the online application form and Balikbayad representatives will get back to you regarding the status of your application.

For Your Immediate Cash Needs –

Getting a personal loan is recommended. You can only borrow smaller amounts, although this would mean higher interest rate and shorter loan term.

When it comes to personal loan, try SSS Salary Loan. The agency allows you to borrow money even while you’re abroad and with no collateral requirement. You can borrow an equivalent of your average monthly salary up to twice its amount with an annual interest rate of 10 percent. Loan term is 24 monthly amortizations.

The best part is you can apply for this online.

In Case You Need A New Vehicle For The Family –

Banks offer competitive car or auto loans to its borrowers. Check with your preferred bank if there is a loan facility that is specifically catered to OFWs.

PNB has Global Filipino Auto Loan that allows you to borrow up to 80 percent of the vehicle’s purchase price.

You can also apply at BDO’s Kabayan Auto Loan where you can borrow starting at P100,000 to maximum of 80 percent of the vehicle’s purchase price. Annual interest rate is between 4.74 percent and 6.8 percent, which will depend on your loan term between two and six years.

Ford also offers OFW Assist wherein you can have the opportunity to own your own Ford car and apply for a loan with EastWest Bank.

If You Want To Invest On Your Future Home –

Of course, who doesn’t want to have their own home?

PAG-IBIG Housing Loan is the most sought after loan facility in case you want to have your own home. This loan facility offers the lowest interest rate of maximum of 10 percent per annum. Loan term is longer because you can stretch this for up to 30 years unlike banks’ 10 to 15 years.

If you still prefer borrowing from the bank, then there are options to choose from. PNB has Philippine Home Loan, which allows you to apply even while overseas. The amount you can borrow is anywhere between P500,000 and 80% of the appraised value of the property you’re aiming for.

SSS also has a Direct Housing Loan Facility, which also offers competitive rate and flexible terms for OFWs. Just make sure you made at least 36 months contribution to qualify for this loan.

Collectively, these are called OFW Loans. OFW Loans are loan facilities specifically catered to OFWs to help address your needs. Unlike ordinary types of loan, OFW loans are designed to fit the needs and capacity of the borrower.

Take a look at these loans and see which one suit your needs best. Keep in mind that the loans have a specific purpose, so make sure to use them accordingly.

Declined Credit Card: What’s Next?

Credit card is one of the most convenient things ever invented that made mankind’s life easier. Think about this: you don’t have to worry about bringing cash with you since you can shop using credit card. Paying for online purchases are also easier and convenient.

Here’s the thing: not everyone are given the opportunity to own a credit card. Even if you can prove your capacity to pay as evidenced by your overseas job, some credit card companies won’t readily issue a credit card for you. As a result, your application is declined.

You might have questions as to why, how, and what you can do to prevent this from happening. You might even wonder what you can do to improve your chances of getting that much needed approval.

In case of declined credit card application, here’s what you can do:

Check The Status Of Your Credit Card Application

Depending on the bank, application process takes between one and three weeks. In fact, some may take longer than usual. The waiting game can be stressful as well because of the uncertainties.

That being said, don’t hesitate to check the status of your credit card application. Calling the appropriate department could help, although a lot of banks are resorting to online inquiry. Check the bank’s policy regarding status update by visiting their respective websites.

Know Thy Reasons

Most credit card companies won’t tell you outright the reasons why your application was declined. Nonetheless, it’s okay if you ask possible reasons so you can make necessary adjustments next time.

Some of the most common reasons why an application is rejected are:

  • Incomplete or incorrect information provided in the application form
  • Low income, which means you might have a hard time paying off come due date
  • Bad credit score, which is also the most common reason why a lot of people get declined
  • Too much debt, such as personal loans or car loan
  • Unpaid credit card bills, which is a red flag for all credit card companies
  • Unstable job history

If you are guilty of any of these reasons, then there is a possibility that your credit card application will be rejected.

What should you do? The next sections will tell you what.

Don’t Re-Apply – Yet

You might be excited to apply for another credit card. DON’T – and here’s why.

First, it’s a bad sign. For credit card companies, the urgency and frequency of applying for a credit card sends a message that you are in need of money.

Second, it has a negative effect on your credit score. Every time you apply for a credit card, the credit card company will look into your credit history, which means all approved and declined credit card applications will reflect. The more they see rejection, the higher the chances of getting your application declined.

What should you do? Wait it out for three to six months before you apply again. During that time, make sure you do what it takes to improve your credit score, which will be discussed next.

Boost Your Credit Score

Credit score is an important factor when it comes to loan application. The higher the score is, the better chances of getting approved.

Since you got declined, take this as an opportunity to improve your score. Make sure you pay all of your bills on time. If you have outstanding credit card bills, then make an effort to settle them or at least lower the balance.

Avoid applying for loans, too, such as personal loan. This could hurt you credit standing because again, it signifies that you are in need of cash.

It will also help to increase your savings account. Having a bank account is a sign of being financially responsible, which is a big plus for credit card companies.

Look For Alternatives

Having a credit card is useful but if your application was declined several times, then you might want to consider other credit alternatives.

You can try getting a secured credit card. Instead of submitting tons of documents to prove your capacity to pay, you have to open a separate savings account or a time deposit, which will serve as your security or guarantee. The downside is that if you miss a payment, the bank can deduct the amount from that account, which also means you need to make sure that it has sufficient funds.

You can also consider getting a prepaid credit card. This is your typical credit card but with spending limit. Once your balance reached zero, you can no longer use it unless you top it up. This is an effective way to help you budget, especially if you still can’t go overseas for work.

Getting declined is fine. Use it as an opportunity to improve your credit standing so that when the time comes, you can apply for bigger loans like housing or business loan and get approved.