What You Need to Know about Collateral Loan

In a previous post, we shared what non-collateral loan is and why this type of loan can be beneficial for you, especially if you don’t have assets under your name. On the other hand, there is another type of loan that you will come across and it goes by the name collateral loan. 

What is this about? How is it different from non-collateral loan?

Keep reading to find out.

Collateral loan, defined

From the name itself, collateral loan is a type of loan that is secured by an asset, preferably under your name, the borrower. This means the loan is guaranteed by an asset and will be transferred in the name of the lender in case you are unable to pay after several demands. This way, the lender is assured that no matter what happens, the loan obligation will be paid and will not lose the entire amount borrowed.

Assets you can use as collateral include property or real estate, vehicle, jewelry, cash account such as time deposit, collectible items, or investment like stocks or mutual funds.

Why apply for a collateral loan? 

You are at risk of losing your property. Why should you go for this type of loan?

First, keep in mind that you will only (possibly) lose the property or any asset you used as a collateral IF you failed to pay your loan obligation. Before that happens, lenders often give borrowers a chance to pay for loan by coming up with an arrangement that is beneficial for both parties.

In case you are still unable to pay despite the arrangement and (the many) chances given to you to be able to pay, then that’s the time when lenders will go after the secured property to cover for the loan. This can be a tedious process, which is why foreclosing an asset is often the last resort.

Nonetheless, the good thing about collateral loan is that you can get a loan regardless of having a bad credit. Your credit score is a crucial factor in determining your credit-worthiness, but lenders are willing to bend the rules and approve your loan application IF you can present any asset for collateral.

Interest rate is often lower compared to non-collateral loan because in collateral loan, there is a security attached to the obligation. There is no better assurance than an asset itself; hence lower interest rate.

What if the value of the collateral is lower than the loan amount? 

Unfortunately, you still have to pay for the entire loan amount. For instance, your loan value is P100,000 and the value of the asset you used as collateral dropped to P80,000. You still need to pay the remaining P20,000 plus interest charges up to the day of payment to fulfill the entire loan obligation.

Does Balikbayad offer collateral loan? 

Apparently, we don’t, although we require you to have a co-maker (who receives remittances from you) when applying for a loan with us. We want to keep loan application and processing simple and straightforward by not asking too much documents from you.

What are you waiting for? Send your loan application now and let us be your partner to help you achieve financial freedom.

Get Approval in Your OWWA Loan with the Help of These Tips

We understand your need and the demands of everyday living. This is why aside from earning in dollars (or any other currency), you still want to put up your own business, regardless of how small it is, to contribute to the growing needs of your family.

This is why OWWA Loan is here to help. It is designed to aid Overseas Filipino Workers in their entrepreneurial dreams by allowing you to borrow as much as P2 million. At the same time, this facility encourages you to stay in the country for good through a sustaining and profitable business.

Here’s the thing: it’s not easy applying for an OWWA Loan. OWWA wants to make sure that they will extending credit to the most deserving workers where the money will be used for a legitimate purpose. More importantly. OWWA wants OFWs who are not only willing but also capable of paying the loan.

Here’s what you need to do to boost your chances of approval:

Verify your OWWA and OFW Status

One of the requirements for OWWA Loan is that the OFW-borrower must be an active OWWA member, as shown through your proof of contribution.

In case you are still working abroad, you can still get your membership certification from OWWA through the Welfare Officer in the Philippine Embassy in the country where you are working. Don’t forget to get your membership certification in OWWA Office once you are back in the Philippines.

Complete the documentary requirements

Once you verified your status as an OFW, it is time to complete documentary requirements needed by OWWA and Land Bank (partner bank) to determine your credit-worthiness.

Below are some of the requirements needed:

  • Certificate of Attendance proving that you completed the Enterprise Development Training (EDT). Read more about EDT here.
  • DTI Business Registration Certificate (if sole proprietorship) or SEC Registration (if corporation)
  • Two (2) valid government-issued IDs
  • Biodata
  • A formal business plan or contract growing, service contract, feasibility study, or purchase order.
  • Business permit
  • Income tax return (ITR) for the last three years
  • Financial statements submitted to the BIR for the last three years
  • Latest interim financial statement
  • Special Power of Attorney (SPA) authorizing your spouse or any immediate family member to transact on your behalf in case you have to go back to the country where you’re working.

Don’t forget your collateral

This is required. Keep in mind that at the end of the day, OWWA and Land Bank want any form of assurance to make sure that they will still be paid in case of default.

Ideally, collateral is any piece of land under your name, the borrower. In case you don’t have a property under your name, you can submit the following as collateral:

  • OR/CR of a vehicle under your name
  • Proof of receivables
  • Lease rental contract where your business is situated
  • Contract agreements such as Deed of Assignment of goods or Purchase Order
  • Apply with a co-borrower with good credit standing

Few more thing to remember

There is a higher chance of approval if you already have a ready market for your product or service. If the business you plan to put up has a projected monthly income of P10,000, then much better. EDT is also crucial, so make sure you call the OWWA Regional Office near you and ask for the schedule for the training.

OWWA Loan may be strict, that’s true. In case you want more relaxed application to help you grow your business, Balikbayad is here to help. Send your loan application now and we’ll help you grow your business – at the most affordable rate.

5 Tips on Asking Someone to be a Co-Maker

According to the Bangko Sentral ng Pilipinas, a co-maker is a person who, by virtue of a contract, promises to pay the principal borrower’s loan in case the he or she failed to do so. A co-maker does not receive the proceeds of the loan, but he or she is equally responsible for payment in case of default.

Here’s the thing: it’s not easy finding a co-maker, let alone making him or her say yes to be one. There is a risk involved and surely, the people you are eyeing for will not want to be part of any form of loan that they weren’t able to enjoy. On the other hand, there are lenders who require a co-maker, especially when you don’t have an impressive credit standing or you are applying for a non-collateral OFW loan.

How can you make someone say yes? You can try these techniques:

1) Choose your co-maker wisely. 

You can’t just pull someone to be a co-maker. This is why ideally, a co-maker must be your spouse, an immediate family member, or a trusted friend you had for years. Before you ask someone to be your co-maker, you need to make sure that your chosen one is also financially capable and willing to pay in the event that you can’t.

2) Ask nicely without being too pushy. 

Getting a loan can be risky, especially for your situation. There is a possibility that you may not be able to finish your contract due to unforeseen events, thereby affecting your cashflow; hence the need for a co-maker.

The key here is to ask nicely and properly. Bring the topic as casually as you can, starting with your intention to get a loan and then the need for a co-maker. Explain the importance of having a co-maker as well.

Avoid being pushy or forcing someone to say to be a co-maker. Don’t bring up the concept of “utang na loob” just to make someone say yes to be your co-maker since you are leaving them with no choice.

3) Respect your potential co-maker’s finances. 

Everybody needs money. Everybody has their own set of financial issues as well. In asking someone to be your co-maker, make sure you consider his or her financial standing. Don’t expect your friend to say yes to you if that friend is struggling with debt too.

Therefore, consider your potential co-maker’s financial standing. If s/he doesn’t owe anything to anyone, then s/he could say yes and help you secure your loan.

4) Provide assurance to build trust. 

One of the main reasons why people don’t want to be a co-maker is because of the risk that comes with it. Can you imagine being responsible to pay for a loan you didn’t enjoy?

This is why it is important to provide assurance to “guarantee” your potential co-maker that you will do everything you can to pay off the loan. If you can, strike a deal that will assure him/her that he will not pay a single cent. This could help him/her say yes to you.

Tip: Seek for a lower amount of loan to make it easier for you to pay the loan.

5) Explain the parameters, terms, and conditions of the loan. 

One of the reasons why people don’t want to be a co-maker is because they don’t understand what it means to be one. This is why instead of forcing, explain what the loan is about. Discuss the terms and conditions of the loan, including the role of a co-maker. It is imperative that you explain everything and make the person understand what being a co-maker is all about.

It’s okay if your potential co-maker said no to you. It’s never okay to force, don’t you think?

Frequently Asked Questions about OFW Loan (Which are Asked by OFWs)

Every year, the total amount of remittances sent by OFWs is worth billions of dollars. This created a positive impact in the Philippine economy, which is why OFWs like you are regarded as modern heroes or “bagong bayani.” 

Here’s the thing: despite earning in dollars, there are still instances when you need to borrow money to finance big purchases such as purchase of a car or your dream home. Before you apply, we list down the common questions asked by many OFWs when it comes to applying for an OFW loan:

1) What is an OFW Loan? 

An OFW Loan is a type of loan facility specifically designed to meet the financial needs of OFWs. It can range from business to personal loans, but the common denominator is that it is intended for the benefit of OFWs.

2) Who is qualified to apply for OFW Loan? 

Since it is specifically geared for OFWs, the individuals qualified to apply for this type of loan are the following:

  • First-time OFWs
  • OFWs with existing contract abroad but are only here in the Philippines for vacation
  • Returning overseas workers or Balik Manggagawa

Take note that some lenders require minimum monthly salary, so make sure you inquire about it first before submitting your loan application.

3) What are the requirements I need to submit when applying for an OFW Loan? 

Every lender has their own set of requirements. Nonetheless, make sure you prepare these documents to facilitate faster approval of your loan application:

  • Philippine passport or Seaman’s Book for seafarers
  • Employment contract validated by the POEA
  • Working visa
  • Overseas employment certificate (OEC)
  • At least one government-issued ID (in lieu of the upcoming OFW ID)
  • Ticket or flight details

4) How much can I borrow?

The loan amount depends on the lender. Many lenders set a minimum amount of P1,000 and a maximum amount of as much as one million. Nonetheless, this doesn’t mean you can get a maximum amount every time you apply for a loan. Lenders still look at your credit history and capacity to pay, which they will use as a basis for your credit amount.

5) How long can I pay for the loan? 

That will also depend on your agreement with the lender. You can borrow money and pay it after 30 days. On the other hand, you are allowed to pay the loan for up to 12 months.

6) I’m about to leave the country. Can I still apply for an OFW Loan?

Of course! In fact, lenders prefer that since you are still here in the Philippines and capable of physically signing the loan documents. A small request, though. If you can, please apply at least 15 days before your scheduled departure to make sure that the application process will proceed smoothly and you can get your money before you leave.

7) Can I apply for a loan while I’m working overseas? 

This will depend on the lender. Here in Balikbayad, we require you to be physically present to be able to sign the documents. Other lenders accept Special Power of Attorney where you will assign any of your family member as your attorney-in-fact. If possible, you can execute the document before you leave and have it notarized, otherwise, the SPA must be consularized.

Read more about Special Power of Attorney here.

8) How long is the application process?

Lenders understand the urgency of your cash needs. That is why many lenders like us are committed to processing your loan application within one banking day. On the other hand, some lenders, especially commercial banks, look into your credit history first before they can extend credit. This will take days to a week or two, depending on the lender.

9) What if I don’t have a property under my name. Can I still apply for a loan? 

The answer is yes. There is a facility called non-collateral loan, which allows you to borrow money even without property under your name. This could mean higher interest rate as a form of guarantee.

Another option would be applying with a co-borrower. A co-borrower is someone who will guarantee your loan and will be contacted by the bank in case you are unable to pay your loan.

10) What should I do to guarantee loan approval? 

  • The information you provided in your loan application must be complete and correct.
  • No history of past due debts, negative findings, and other money-related court cases.
  • Borrow money that is within your salary or capacity to pay.
  • You must provide all documents needed to prove your capacity to pay the loan.
  • Establish your beneficiaries of the loan.

11) What are the modes of payment? 

You can pay your loan via post-dated check or direct deposit to account. If you will apply in banks, most of them will recommend (if not impose) automatic debit arrangement since it is easier and more convenient. No reminders will be sent since the system automatically deducts the amount from your account (so make sure you have sufficient funds every month).

12) Where can I use the proceeds of my OFW Loan? 

Ideally, it will depend on you and your needs. You can use the proceeds of your loan to start a small business, finance immediate and emergency needs, renovate your home, or even use it as a downpayment for a major purchase. Nonetheless, you have to be clear on your purpose. Some lenders don’t allow the funds to be used to pay for placement fee and other fees related to applying for a job abroad. Ask your lender first to be sure.

Got more questions? Let us know by leaving a comment below. 

Travel Loan: Should You Get One to, uhhh, Travel?

We all have our own personal needs. For every need, there is a type of loan that specifically addressed that need. One of them is the need to travel; hence the travel loan.

Travelling is a luxury. Aside from being able to go to a different place and experience different things (including food), you spend certain number of your days not working. Nonetheless, it’s a time well-spent with the family and you are only making the most out of your stay here in the Philippines.

Here’s the thing: can your budget allow you to travel? Even if you can, will you still have sufficient funds by the time you go back abroad? This leads you to the next question: should you apply for a travel loan in order to travel?

Check out these factors you need to consider to help you decide whether getting one is worth it:

Travel Factor No. 1: The need to borrow

This is the first factor you need to look into before you apply for a loan.

Travel loan can be convenient because it allows you to increase your buying power when going somewhere. On the other hand, do you have sufficient funds and steady income to pay for the loan? If not, perhaps it is best to postpone the trip instead and save up for it later.

Travel Factor No. 2: An existing credit card

Let’s say you really want to travel with your family even if it’s only here in the Philippines. Fine. Instead of getting a loan, do you have an existing credit card you can use to finance your travel expenses?

Travel loan may have lower interest rate compared to credit cards, but keep in mind that credit card companies give out perks and benefits to its clients. Check out their partner establishments for hotels, restaurants, and other recreational facilities and take advantage of them.

Travel Factor No. 3: Current financial situation 

Apart from your credit card, if any, you also have to look into your current financial standing. This means you need to check and evaluate how much you are earning and spending every month. You also need to take note of any existing loans and employment status in relation to the current situation of the country where you are working to make sure you can pay off your travel loan.

This is why it is important to create a budget. It will make it easier for you to check how much money is going to specific expenses and help you decide whether you can still accommodate another loan.

Travel Factor No. 4: The loan terms

Assuming that your salary allows you to get a travel loan on your next trip back to the Philippines. This doesn’t mean you will automatically apply for a loan.

Check out the interest rate and consider the lender that offers low rates. Clarify whether the loan is secured or unsecured, since unsecured ones may have higher interest rate, although it will protect your assets against possible foreclosure. Aside from this, make sure to ask about repayment terms. As a rule, travel loan must be repaid in less than a year, so make sure you negotiate the terms well.

Travel Factor No. 5: Your destination

Where do you plan to go with your family? Many OFWs opt to travel in the Philippines with their families to cure homesickness while there are still others who prefer bringing their family overseas.

Regardless of where you plan to go, it is a must to anticipate your expenses to help you determine whether getting a travel loan is necessary. If you plan to go overseas, how much is the air fare, hotel accommodation, food, exchange rate, and transportation expenses when going around the city. If you wish to stay here, gauge how much are the transportation costs, hotel accommodation, and food among others. Make sure you have enough cash to cover for these expenses.

So, is it advisable to get a travel loan? That depends on you. No one can stop you from borrowing money to give your family a grand vacation, but make sure to remember these three things:

  • The amount you will borrow should cover only the essential costs.
  • There will be an interest on top of the amount you will borrow.
  • Despite the availability and accessibility of travel loan, make sure to travel within your means.

After all, you don’t want to waste few years paying for a one-week vacation, do you?

5 Tips on How to Get the Best Deal on Your OFW Loan

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.

When Is the Right Time to Apply for a Loan?

Medical bills, tuition fee of kids, unpaid bills with past due notices – these are some of the many instances that forces you to borrow money in order to pay for these expenses. By borrowing money, this could mean borrowing from friends or family or getting a loan from the bank, whichever is applicable.

Here’s the thing: there are instances when you might not need to borrow money from banks or your family.

Check out these guidelines or instances on when is the right time to get a loan. 

1) Repay a loan with higher interest

As a rule, borrowing money to pay off your already borrowed money is a big no-no. On the other hand, there are instances when you are allowed to get a loan to pay for your existing debts.

If your existing loan has higher interest rate, then look for a loan with lower interest rate. In doing so, you will be able to save more on interest, thereby increasing your chances of repayment. This could get an instant boost in your credit score as well.

Tip: Consider debt consolidation. This means all of the loans are under one unified loan with one interest rate and one due date. This will make it easier for you to manage debts.

2) Getting a higher education

You can’t be an OFW forever and that’s okay. If you plan to pursue higher education or get further studies, then getting a loan is fine.

It’s not just any other loan. Apply for a salary loan so it will be easier for you to pay for the loan while getting a career boost.

3) Established cash flow every month

Time and again, we always emphasized the importance of growing your money through various investments. After all, you can’t work overseas forever. This is why it is imperative that you start growing your money so you will have a stable cash flow in case something happens, say sudden termination of employment or accidents.

Once you have an established cash flow, that’s the time that getting a loan is advisable. Keep in mind that lenders look closely at your ability to pay, whether in the form of monthly salary or any other modes of cash income. If you are able to prove that you can pay your loan, then there is a higher chance of approval.

On the other hand, there are cases when getting a loan is not advisable. These instances include:

  •  Travel money – Going somewhere with the family can be exciting. Still, borrowing money to be able to pay for your travel expenses is not advisable. If you plan to pay for your travel expenses by getting a loan, then it is best not to get a loan and save up for that instead.
  • Buying material things – Want a new phone or a tablet but you have not enough funds to finance for it? Then save up for it instead of getting a loan. Borrowing money to buy goods, especially something that won’t last is not recommended.

Lenders like Balikbayad will always be there to help you with your cash needs. Still, keep in mind that they consider a lot of factors before you get that loan approval. Avoid borrowing money just to get out of your current situation. Loans will always be loans and any unpaid loans can take a toll in your credit score.

5 Tips on How to Speed Up Your Seaman’s Loan Approval

Are you a seaman who is in need of cash? Do you need money to finance the purchase of a car or to help you put up your own business? Then there is good news for you. Apart from the usual OFW Loan, many lenders also offer Seaman Loan exclusively for seafarers like you.

Seaman Loan is a type of financing option specifically designed for seamen and their families. Similar to other types of loan, a Seafarer’s Loan requires qualifications before you get approved.

Don’t worry. There are many ways to help you get approved faster when you apply for a Seaman’s Loan. This includes: 

1) Complete all the requirements needed. 

Lenders deal with tons of applications everyday. They have to go through every set submitted to check if the requirements are complete and endorse the application for approval. If you are unable to submit a complete set of requirements, lenders will less likely prioritize your application.

Before you submit an application form, make sure that you have all the requirements needed, which includes birth certificate and government-issued IDs. If you want faster approval, don’t forget to provide documents that will show your capacity to pay such as Fleet Manager’s Recommendation or Joining Date Disclosure.

2) Prove your salary status. 

Lenders are not willing to extend credit to everyone, most especially to those who are not capable of paying back a loan. To speed up your Seaman’s Loan approval, make sure that you are able to prove your capacity to pay by showing your salary status.

3) Know your dates. 

There is a reason why lenders, regardless if you are borrowing from the government, commercial banks, or private lenders, ask for your Certificate of Employment or Overseas Employment Contract every time you apply for a loan. They need to know the status of your employment and when you are coming back.

Many OFWs think that just because you are abroad for two years (or more, depending on your contract), it will be harder for lenders to go after you. If they see that your employment is unsecured, they are less likely to extend credit.

What kind of dates should you provide? The Joining Date Disclosure, which you can get from your Fleet Manager, and Departure Date. These two will show lenders that you have a secured job and salary to pay for the loan.

4) Prove your residence status. 

Do you know why lenders have soft spot on collateral loans? It is a form of assurance for them of your intention to return to the Philippines once your contract expires.

If you want to speed up your application and increase the chances of approval, secure your residence status through home ownership or use one of your properties as a mortgage for the loan.

What if you don’t have your own home yet? If you are living with your parents or relatives or have an ancestral home (don’t worry, it doesn’t have to be big), then you can use that to prove your residence status as well. Otherwise, you can try the next tip.

5) Apply with a co-borrower.

A co-borrower is common on non-collateral loan and whose role is to pay for the monthly amortization of the loan in case you failed to pay.

Lenders understand that not all OFWs have properties to help secure the loan. In that case, you can apply with a co-borrower since it also serves as an assurance that lenders can go after someone in case you missed a payment.

Do you want to make loan application easier for you? Then Balikbayad might be of help. Give us a call or send us a message and let’s talk about how we can help each other.

Car Buying Guide for Every OFW

 Who doesn’t want to own a car? Aside from your Dream Home, you surely want a vehicle that can bring you and your family from point A to point B with ease and comfort as part of the fruits of your labor. Similar to a house, buying a car can be costly on your wallet too.

The good news is banks and lending institutions offer Auto Loans and catered specifically to Overseas Filipino Workers. Similar to other types of loan, a Car Loan requires you to pay monthly installments, including interest rate. Typically, an auto loan is good for one to five years, depending on your capacity to pay.

Before you apply for one, make sure you remember the following things:

1) Know what you want. 

Cars can be divided into two major categories: brand-new and previously owned. Before you start with your research, decide what type of car to buy first then move on from there. Look into your options – the brand, car specifications, gas or diesel, expected maintenance costs. If you are planning to buy a previously-owned vehicle, the car’s mileage must also be considered. You should look into the car’s overall functionality as well, which leads you to this next pointer.

2) Think about the people who will ride the car. 

You want a sports car so bad and that’s fine; however, can you and your kids fit in there?

When looking for a car, consider the people who will ride in it. It should be able to house your family comfortably, especially during long travels. This is why it is important that you choose a car that will meet both reliability and functionality.

3) Set a budget. 

Car, whether brand new or previously-owned, is expensive. If you are diligent with your savings, you can use that amount to cover the expenses for buying a car. On the other hand, you can apply for a Car Loan  to make the purchase more manageable without immediately breaking the bank. This will limit your choices as well.

4) Car loan duration also matters. 

Here’s another question you need to ask: how long are you planning to pay for the auto loan?

Car loan often comes in three periods – 36, 48, and 60 months. Each loan duration has its pros and cons. Opting for the 60 months could yield lower monthly amortization, but are you willing to pay for a vehicle for that long? On the other hand, you may choose the 36 months; however, the monthly amortization can be higher.

Most lenders have built-in loan calculators that allow you to check how much will you pay given this time frame.

5) Your credit standing also matters. 

Let’s say you can shoulder 30 percent of the car’s purchase price and will only ask the bank to shoulder the remaining balance. Does this guarantee approval?

The answer is no.

Regardless of how much you can shoulder, lenders will still look into your credit standing to determine if you are worthy of credit. Don’t worry. You can still boost your credit standing with the help of these tips.

6) Choose your lender wisely. 

At this point, you already decided what car to buy. The next step is to choose a lender that will help you finance your purchase.

Don’t go from bank to bank and submit an application. Utilize the Internet, compare the rates lenders offer, and trim your choices to two. Inquire personally, don’t be afraid to ask questions, and observe how the bank staff will treat you. Remember: they should treat you as a partner and not just a borrower.

7) Don’t forget to read the fine print. 

Banks and other lending companies can be creative in coining terms that aim to extort money from you without you even noticing it. Before you sign the contract, make sure to read the fine print and ask questions when there are terms you don’t understand.

Are you ready to buy your own car?

7 Things OFWs Should Know When Buying the Dream Home

Admit it. You dream of having a place you can call your home. That is why you work hard overseas to save up for your dream home where you can settle down when you are back in the Philippines.

Then reality knocks at your door to remind you that owning a home is not as easy as it seems. It will take years and tons of extra jobs before you can buy a house in cash, which is why you will need the help of lenders by applying for a Home Loan.

Before you submit any application, make sure you remember these things: 1) Reason of Purchasing a Home

What is the purpose of your intention to buy a house? Is it a family dwelling or something you want to rent out for additional income? It is important to establish the purpose of buying a house before you send your home loan application to banks. Determining the purpose of buying a home will help you in deciding various factors like the location, finishing type, price, and the type of house you intend to buy.

2) It’s You or Your Chosen Representative 

As an OFW, it is expected that you won’t be in the Philippines most of the time. When applying for a Home Loan, you can either:

  • Personally apply by going to the bank while you are here in the country
  • Appoint someone to act on your behalf, also known as Attorney-in-Fact (AIF), by virtue of a Special Power of Attorney (SPA).

In case you are appointing someone to act and process the Home Loan application on your behalf, make sure that you choose someone you can trust and is responsible to handle the transactions, preferably your spouse, your legal child, or any of your family members. The AIF will be responsible in signing legal documents.

3) Do Your Homework

The property development industry is booming nowadays. Wherever you are, you will always find “For Sale” signs and construction that signify new houses will rise in that place. Advertisements are also rampant in the Internet, thereby making it easier for you to find the perfect house for you and your family.

When buying a home, make sure to explore your options then narrow down your choices to Location, Property Type, and Price of the Property. These three factors will help you decide where to buy your dream home.

4) Know the Developer

Reputation is everything, especially when it comes to property development. You might be tempted to buy that P1 million-worth of house, but do you even know who developed it? Maximize the use of Internet by knowing the reliable developers and the developer of the property you are eyeing for. You want to get your money’s worth, so make sure you choose a developer who can give you that – and more.

5) Visit the Site

You want to see how the property looks and the best way to do it is by visiting the actual site. While you are in the Philippines, you can take your vacation as an opportunity to do the ocular. In case you are overseas, your attorney-in-fact and other members of the family could do it to give them a more personal feel of the property.

6) Choose Your Lender

Now that you have a property in mind, did the ocular, and made a reservation, it is time to look for the perfect lender that will assist you with your purchasing needs.

There are several banks and lending institutions that offer Home Loan to OFWs. Know your options by inquiring then comparing their rates and loan terms. Find someone who can give you flexibility while ensuring you and your family that you are well taken cared of.

7) Prepare the Requirements

All types of loans, including a Housing Loan have prescribed a list of requirements that you need to comply. Once you chose your lender, ask for the list of requirements and make sure to provide them as soon as you can to avoid delay in the processing of your loan application. Basic requirements include:

  • Employment contract
  • Proof of monthly remittances
  • POEA-validated crew contract and exit pass if you are a seafarer

With these tips in mind, are you ready to purchase your Dream Home?