Most people think that if someone in the family works abroad, life is easier and better. After all, someone is earning in dollars (and we know how much the exchange rate is now, which is currently at P50 mark as of this writing). When you earn in dollars, this could mean you and your family can easily afford anything you like, or at least according to their expectations.
On the other hand, lenders, both commercial banks and private financial institutions, realize that not all OFWs are living the good life. In fact, there are still many who are having a hard time, especially in the financial aspect. This is why they offer various products specifically for OFWs – with perks.
Here’s the challenge: finding the best deal on your loan, regardless of the kind of loan you are getting.
Here’s what you can do to make sure you get the best deal every time you apply for a loan – and make the loan work for you:
1) Always submit the requirements needed.
You have the tendency to blame the lender for not immediately processing your loan. Aside from processing tons of loan applications in a day, one of the reasons why there is delay is because you did not submit all documents required.
If you want to speed up the processing of your loan application, then make sure you submit everything they ask for. The same goes for online application.
2) First, compare and then decide.
It’s okay to ask recommendations from friends about the best lenders in town. Before you say yes to a specific lender, make sure you explore your options first.
Use the Internet and look for lenders that offer the loan facility you are looking for. Many lenders post their rates and charges, so make sure to take note of that. Don’t forget to check the “Review” section to see what other clients are saying.
Tip: Look for loan comparison charts or tools similar to this one. Through this, you can easily see how much every lender charges and help you decide which lender you can afford.
3) Know how much is your capacity to pay.
One of the common mistakes made by OFWs when applying for a loan is asking for too much. This means when you are earning P40,000 every month and owns a property worth P300,000, you will ask for a million-worth of loan. That is outright rejection since lenders will be concerned on how you can pay for the loan.
Before you apply for a loan, make sure you check on your finances and savings first to determine how much you are worth. Any existing debt, whether from credit card or other loans, must also be included since they could affect your cash flow and capacity to pay the new loan.
In other words, be realistic. Don’t ask for too much when you don’t have enough assets to back it up to avoid loan rejection.
4) Go for the right type of loan and according to your needs.
The good news is loan comes in various types that will match your specific needs. Even if they have a common denominator, which is loan, loan products are designed in such a way that could work for you. The rates and charges vary too, so look into that as well.
Know what you need first then check if your lender offers a facility specifically for that need.
5) It’s okay to negotiate the rates and loan terms.
Yes, you read that right. Lenders follow the rate prescribed by the Bangko Sentral ng Pilipinas (BSP) and adjust it to make sure they can earn. Nonetheless, try negotiating the rates and terms of the loan to make it favorable to you, without compromising the bank’s standing.
Still, this would depend. Improve your savings account, prove your ability to pay, and maintain a good credit score. This is no guarantee, but these three factors could help.