You Don’t Need Millions: Business Ideas You Can Try with Little Capital

Business Ideas for OFWsLet’s say you won in the lottery and the jackpot prize is P50 million. What will you do with the money? Surely, you’ll buy your own house, car (or two!), pay off all your debts, and put up your own business.

What if we tell you that you don’t need millions to become an entrepreneur? Believe it or not, there are business ideas worth trying with only little money involved. Even if it didn’t turn out the way you hoped it would, at least you did not invest a big chunk of your savings on it.

If you are an OFW and looking for affordable business ideas that could help increase your family’s cash flow, then this one is for you. Check out this list and find out what could work for you:

1) Street food business

Many Filipinos love to eat fishballs, kikiam, pork barbecue, isaw, kwek-kwek, and any other street food you can find, especially for merienda. Take advantage of that by putting up your own street food business. All you need is a stall, which can even be in front of your home, griller, and food variants you will sell and you’re all set.

Tip: Aside from the staples, offer other foods like cheese sticks, french fries, hotdogs, and even hard-boiled eggs. Having a variety means you get to cater to different markets, both old and young. Don’t forget the drinks.

2) Cellphone loading 

Who doesn’t have or need a mobile phone? It doesn’t matter how much it costs, but many people need a phone to make communication easier and more convenient. Since not everyone can afford getting a post-paid plan, many Filipinos are still sticking to prepaid. This can be a perfect opportunity to make the most out of this demand by having your own cellphone loading station.

The capital to start this business plus the return may not be that big, but it could give you something extra for the rainy days.

Tip: Make sure that load is available anytime. The more consistent you are, the more customers you will have.

3) Eatery or Carinderia

Who doesn’t love food? If your spouse has the knack for cooking and serving delicious meals, then maximize that talent and put up your own carinderia.

Don’t be afraid to try this one. Target market is not an issue, but the key here is your location, so make sure to set up the carinderia in the right place.

Tip: Consider food delivery service in offices or any business establishments. Everyday, make a menu and deliver the food according to the number of orders. This will give your family extra cash, plus who knows, it could lead to something bigger, say your own restaurant.

4) Food Cart 

Let’s say you are drawn to the food business but not really into cooking. That’s fine. There are many franchisers offering food carts for as little as P20,000, which is ideal for starting entrepreneurs like you.

The good thing about this business is that you don’t have to worry about anything since everything is provided, except that you need the right location. Make sure you choose an area with high foot traffic to encourage more sales.

Tip: Take a risk and start your own food cart. With the right marketing techniques and product, you might soon be a franchisor with people wanting to franchise your business.

5) Online Selling

Online entrepreneurs are becoming popular these days. All you need is a laptop, a good camera, decent Internet connection, and products to sell, and you’re good to go. You can source your products from where you are working or if any of your family members is good at anything, say crafting or baking, then maximize on it.

For starters, you can advertise your products in e-commerce sites like Ebay Philippines and OLX. Facebook and Instagram are also popular channels with many users logging in everyday (who can be your potential customers too). Just make sure to update your page regularly and be nice to customers.

Tip: Choose a product that is not common to many online sellers. This will set you apart from the rest and you will be able to penetrate the market with lesser competition; hence higher sales.

Don’t just limit yourself with these business ideas. Explore your options, know what is required of that particular venture, and stick to it. It will take time before you see the results of your investment, so be patient.

Car vs. House: Which One Should You Buy First?

Let’s say you have a five million pesos at your disposal. What will you buy first – a car or a house? Or both?

This is a common dilemma among many OFW families. You work hard overseas to give your family the best things in the world and that includes a house and a car you can call your own, Apparently, you can’t have both since both are major purchases that could affect your cash flow.

This leads you now to the next dilemma: what should you buy first between a car and a house? We hope this post will help to help you decide on which is worth investing first.

But first, evaluate your current situation 

Before you decide on what to buy, you need to assess your current financial standing first. Here are some questions you need to answer to help you evaluate your financial condition:

  • How much money am I making?
  • How much money do I have left after all expenses and savings?
  • Can I pay the car or house in full?
  • How much do I have to pay if I decide to get a car or a house?
  • What expenses can I forego in order to accommodate the loan?
  • Do I have extra money to accommodate the monthly amortization?
  • Will the monthly amortization create a strain on my buying capacity?
  • Do I have savings or emergency fund that could back me up in case of loss employment?

These simple questions can help you look into your financial standing and determine whether or not buying a new car or house is within your means.

Buying your dream car

Advantages

  • Allows you to go from one place to another with ease and comfort since you and your family don’t have to ride public transport.
  • Makes it easier for you to travel with your family, especially if you are going out of the city.
  • If you avail of a loan, you can choose your loan term according to your capacity to pay, but up to five years only. This makes it faster for you to pay off your loan.

Disadvantages

  • You have to pay for after-sales costs such as insurance, car maintenance, and repairs in case the car breakdowns.
  • It is advisable that you have a parking slot first to avoid causing hassle not just on your neighbors but also on other people who pass by your area.
  • The price of the car depreciates over time and as soon as it stepped out of the dealer’s store. This means the P1 million car you bought now will only be less than that after a year.

Buying your dream house

Advantages

  • Owning a house is a status symbol that signifies financial achievement.
  • The price appreciates over time. If you buy a house worth P1 million today, there is a higher possibility that the value will be doubled or even tripled after 10 years, especially if you bought the right property in the right location.
  • A type of investment that you can pass on to other generations.
  • You can finally have a place you can call your own.

Disadvantages

  • There are many developers who are offering sub-standard quality of houses. Before you make a purchase, make sure to check the developer to make sure you are getting your money’s worth.
  • Higher monthly amortization with longer loan term.
  • More costly to maintain compared to cars.

Whether you decide to go for the car or house is all up to you. We enumerated the pros and cons of buying a car or a house to help you decide on the best investment option. Use this as a guide and more importantly, consider your family’s needs to help you in making the right purchase.

6 Money Management Tips for the OFW Spouse

There is a reason why your spouse decided to take a leap of faith and work overseas: s/he wanted to provide a better life for you and your children. Since s/he is earning more by working abroad, getting that dream home or setting up your retirement fund is now possible.

Admit it. There are times when you are tempted to spend the money sent by your spouse to buy new set of clothes, shoes for your kids, and even the latest gadgets. “Pwede naman magpadala ulit eh. Minsan lang naman,” you tell yourself.

Don’t be too complacent. The problem with this kind of thinking is that you will constantly look for excuses to justify your spending that you might be surprised finding yourself with little to no money left. Worse, you lose the trust of your spouse, who is working hard just to make sure s/he provides a better life.

What can you do to protect and preserve your spouse’s hard-earned money? Here’s what: 

1) Live a simple and modest lifestyle.

The thought of your spouse earning in dollars excites you. Finally, you can afford beautiful things you never thought you could own. As a result, you upgraded your lifestyle, buying things you don’t really need. Still, keep in mind that every peso you spend is equivalent to blood, sweat, tears, and hard work of your spouse who sacrificed a lot just to provide a better life for your family.

Therefore, live a simple life. Being an OFW is not forever. Maintain a simple lifestyle and use your spouse’s hard-earned money for important things such as savings.

2) Set a budget. 

Here’s how to do it: determine how much money your spouse is sending every month. Then make a list of all the expenses, whether daily, weekly, or monthly and then deduct it from the money you are getting to see how much you have left. Whatever is left must be allocated to savings and investment.

Tip: Check your list of expenses and see what you can eliminate from the list. Make sure to prioritize basic necessities so you can have more budget for savings.

3) Don’t be too generous. 

Common Filipino thinking dictates that when one member of the family is working overseas, the entire family is living a good life. As a result, you are often a prey to your relatives’ needs. They would often call you and ask if they can borrow money or finance their needs.

DON’T GIVE IN all the time. Remember that your spouse is working hard for that money sent to you. Don’t give it away for the sake of utang na loob. Put your family’s needs first before the others. When you are the one in need, they might not even help you anyway.

4) Take it easy on loans and credit cards. 

Loans and credit cards are there to save the day, especially during emergency. (READ: When is the right time to apply for a loan?) On the other hand, there are cases when you need to say no to protect your family’s financial status.

As much as possible, save up for what you need and pay it in cash. Don’t spend the money you still don’t have. If you are not too careful, you might find yourself swimming in a pool of debt and you don’t want that to happen.

5) Keep the kids involved in handling finances. 

Handling your spouse’s money is not just your sole responsibility. Make sure you include your kids, if any, on various ways to preserve your spouse’s hard-earned money. Encourage saving, no matter how small the amount is. Set financial goals that your kids can easily achieve. By keeping them involved, you will be able to grow your spouse’s money in no time.

6) Educate yourself about investment. 

Do you know that common reason why Filipinos don’t invest? It’s because they don’t know or they don’t understand how it works.

The good news is there are tons of information available online that will help you understand how various investment products works. Take advantage of the videos, articles, and courses offered to educate yourself more about the many investment tools you can try. The more educated you are, the better the possibility of growing your money.

Remember that being an OFW is not forever. There will come a time when your spouse will go home or his employment will be cut short and you need to be prepared when that time comes. Save, invest, and live a simple life. These tricks will help you sustain a better future for the family.

5 Money Mistakes Seafarers Make (and What to Do to Reverse It!)

 The employment for seafarers is endless. Since 2000, the marine industry was flourishing, thereby providing tons of jobs for many Filipinos. Nonetheless, being a seafarer is difficult. You have to leave your family to secure a better future while spending a lot of time in the middle of the ocean. Still, all the sacrifices are worth it. You get to earn more than what you can earn here and give your family a more convenient life.

Don’t get too excited. Living the dream of a good life may keep your family happy, but this could send you to bankruptcy, especially if you are not too careful with your money. The good news is you can do something to avoid the bankrupt path by avoiding these money mistakes many seafarers make:

1) Splurging on material things

This is a common mistake committed not just by seafarers but almost all Filipinos.

Now that you are a seafarer, you have the privilege of earning twice or thrice than what you can earn here and that makes you excited. The tips you get from customers on the ship and bonuses, if you’re lucky, can make you buy the latest gadgets or the newest shoes for your family. Plus, it is cheaper overseas than buying those items in the Philippines, so you figured why not.

It’s okay if you buy once in a while. On the other hand, splurging on material things on a regular habit, say sending them a package every month, is too much. Yes, it will keep your family happy, but what about your savings?

What to do: Create a budget list, which indicates items you really need. Sure, you want the best for your family, but by best, this means giving them something that will last a lifetime. Never let material things be your family’s definition of happiness or a gauge on whether you love them or not.

2) Salary dedicated to remittance

You want your family to experience the good life and that’s fine. To make sure they live comfortably, you send all (or at least a big chunk of) your salary to your family back home. Worse, you may even carry the burden of shouldering even your extended family’s needs.

(Read: How to say NO to your extended family’s requests)

What to do: Stick to a budget. It’s okay to send money back home, but don’t send everything. Allot money for your savings as well because you need something for the rainy days. As to your extended family’s requests, don’t easily give in to their demands. Let them stand on their own feet because the more you say yes, the more they will take advantage.

3) No budget 

You got your monthly salary and you’re happy. The challenge now is what to do with it. Many seafarers and OFWs in general don’t know how to budget. As a result, many end up using their entire salary and leaving little to nothing for the most important expenses such as investment or savings.

What to do: Make a budget starting with your monthly salary on top (salary must be in net amount, which means salary after all the deductions). Then list all your daily expenses, regardless of the amount, such as transportation fees, food, rent, and monthly remittances. See how much more you have left then allocate the remaining amount for savings and other types of investment. Stick to it to make budgeting more effective.

4) Not saving for retirement

You can’t be a seafarer forever. There might also be instances when your employment is terminated early due to unforeseen circumstances. Unfortunately, many Filipino seafarers are focusing on the now and fails to look at retirement plans.

What to do: Start thinking about future plans, including your retirement. Save as much as you can and look for options on how to grow your money. We also shared six tips on how to help you save for retirement, which you can read here.

5) The “Pasikat” mentality

Many Filipinos think that if one member of the family is working abroad, then the family must be living a good life. As a result, you feel pressured to live up to that expectation, which explains why you always throw a party or treat your friends and family if you are back home. Sadly, there is a danger in that and before you know it, you are using your monthly salary splurging on things that won’t last long, just to keep up with that expectation.

What to do: Ditch the pasikat mentality and start focusing on your family’s future. It doesn’t matter if you don’t own the latest gadget or if your son is not wearing the newest Nike rubber shoes. As long as you invest your money in the right ventures, you will be able to grow them and finally, you get to enjoy things you sacrificed before.

8 Questions You Need to Ask Before You Apply for a Loan

You already identified the right instances on when to apply for a loan. Assuming you really need one, this doesn’t mean you should go to your preferred lender immediately and submit your loan application together with the other requirements. There are several factors you need to consider first to avoid getting yourself in a pool of debt.

Before you apply for a loan, here are eight questions you need to ask first: 

1) Am I qualified to apply for a loan?

This is the first question you need to ask before you apply for any kind of loan. Keep in mind that there are many factors lenders consider in applying for a loan. This includes your capacity to pay, asset that you are willing to offer as a security, and your credit score among many others. These factors will help you determine whether you are qualified for a loan or not.  

2) Where will I use the loan proceeds? 

Getting a loan to pay for your travel expenses or purchase of material things like a new iPhone are instances where loan is not highly recommended.

If you plan to apply for a loan, establish where you will use the proceeds, say to put up your own business or pursue higher education. If it is something personal and won’t benefit you in the long run, then it is best to hold that expense first and save for it instead of getting a loan.

3) How much do I need? 

One of the most common mistakes committed by OFWs is asking more than what they can really pay. This means if you are earning P40,000 every month with P100,000-worth of collateral to offer, don’t expect the bank to extend P500,000 credit to you.

Know how much you need while taking into consideration your monthly cash flow. Be realistic with your loan amount to improve your chances of approval.

4) How will I pay for the loan? 

Now that you have a realistic loan amount, the next thing you need to answer is how to pay for your loan.

Ideally, your monthly salary should cover for it, but keep in mind that you have other expenses such as remittances. Before you apply for a loan, take a look at your budget first and see if you can accommodate another expense. If you don’t have adequate amount of cash on hand, hold that loan first since there is a higher chance of getting denied.

5) Do I have to offer a security for the loan? 

There are two types of loan: secured and non-secured. Lenders would prefer secured loan since there is an assurance of payment in case of default. On the other hand, many OFWs have no asset to offer as a collateral, which is why you can opt for a non-collateral loan.

Here’s the catch: non-collateral loan means you will be charged with higher interest rate. This is the lender’s form of security since there is no asset they can recover from in case of non-payment of loan.

6) How long will I have to repay the loan? 

Loan term depends on the type of loan you are getting. Housing loan can go as much as 15 to 20 years while car loan is anytime between one and five years. For personal loans, it can go from one month to a year (or more).

When applying for a loan, make sure you’ll consider the loan term as well. The longer the term, the more interest you have to pay. Don’t forget to ask about pre-termination fee, if any, since some lenders charge a fee if you will pay off your loan before the due date.

7) What will happen if I missed a payment? 

This is another factor you need to look into. When you apply for a loan, don’t forget to ask the penalty fee in case you weren’t able to pay on time.

Tip: Some lenders may agree to waive penalty fee, depending on certain factors. Make sure you have consistent remittances and maintain a good credit standing to be able to enjoy this privilege.

8) Will the loan be beneficial for me? 

More importantly, do you really need to get a loan? The loan must be beneficial for you, say to help you grow your business. If getting a loan won’t help you in any way and you might end up swimming in a pool of debt, then it is best to hold off that application first.

Are you ready to get a loan? Balikbayad is here to help! Give us a call and let’s talk so we can see how we can help each other. 

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.

The 6 Truths about Being an OFW and the OFW Life

“Sigurado ako marami ka ng pera.” “Wow, dollars, pautang naman.” “Ang ginhawa na siguro ng buhay ng pamilya mo, noh?” 

How many times do you hear these from friends and relatives?

For most Filipinos, being an OFW is a promise of good life. You get to earn more than what you can earn here and you are now able to provide a better future for your family. On the other hand, not everyone is aware of the hard work and sacrifices you need to make to be able to give your family a comfortable life. In fact, below are some of the truths behind the OFW life:

1) No, OFWs are not rich. 

There will always be success stories and former OFWs who made it big either in the Philippines or abroad. Believe it or not, most OFWs are still not living the good life despite earning more and in dollars. Some even have an existing home or auto loan with banks that they are unable to pay.

Blame it on the lack of financial knowledge, poor money management, and never-ending family issues that keep majority of OFWs from becoming millionaires.

2) Setting aside money for savings is never easy. 

Did you know that only 35.8 percent of OFWs have savings? The number is increasing over the years, but it only shows that not everyone are setting aside enough money for the rainy days.

With the bills that need to be paid, a balikbayan box waiting to be filled, and everyday expenses abroad, there is little left for savings. This could be the reason why OFWs continuously work overseas to be able to finance the family’s everyday living.

3) Income is not as big as you imagined. 

You might think that since OFWs earn in dollars, it means they earn more than what you earn. That is true. Unfortunately, they get to spend in dollars too. The cost of living varies per country, but one thing is for sure: it is more expensive to live in other countries than to live in the Philippines.

Yes, OFWs earn bigger income, but the cost of living is higher, which explains why they take more than one job to make ends meet.

4) It takes time to fill up a balikbayan box. 

Contrary to popular belief, OFWs don’t spend an entire day shopping to send a box full of goodies back home (they would rather work since a no work day equates to money lost). Believe it or not, it will take time for them to complete their family’s bilin, to the point of scrimping or foregoing basic necessities for their family’s sake.

5) Multiple debts is the new normal. 

Many OFWs are swimming in a pool of debt, even to the point of borrowing money to pay for placement and documentation fees. To pay-off existing loans. some even borrow money, thereby adding another loan in the list. This is normal for most OFWs.

6) Life overseas is not as easy as it seems. 

Filipinos working overseas are not living the carefree life. Most of them have more than one job to make end meets and be able to send a bigger amount in their family back home. Many are letting go of their basic needs just to cover the expenses of their family. Even if you see them posting travel pictures on Facebook, most likely they availed of budget travel package or saved up for their much-deserved vacation for months.

In other words, being an OFW is not as easy as you think it looks. It entails a lo of hard work and sacrifice, which we all need to acknowledge.

Get to Know the 4 Different Ways on How to Protect Your Hard-Earned Money

OFW MoneyHow many years are you working abroad? In that, say two or three years, how much were you able to save? If you don’t have enough cash to last you for at least three to six months, then perhaps you are doing something wrong along the way, at least in the financial aspect.

Don’t worry. It’s not too late for you. You can still protect your hard-earned money (and have something for the rainy days) with the help of these tips:

1) Be wise with your investments. 

Admit it. You are saving up for your dream home or dream car for the family. Apart from setting aside a portion of your money for that, you also considered getting a loan to cover a big chunk of the purchase price. The problem with this is that being an OFW is not forever and there is a possibility that you might not be able to pay the amortization regularly.

This is where investments come in. Consider opening a time deposit account or try the stock market.  The more diverse your portfolio is, the better for you to grow your money.

2) Protect yourself against uncertainties. 

The future is and will always be uncertain. You will never know what could happen to you, which is why you need to prepare yourself for the worst. By worst, this could mean loss of employment, sudden sickness in the family that could deplete your savings, or even death.

This is why it is important to be prepared.

Start by creating your own emergency fund, which should be at least three to six months-worth of your current income. Getting an insurance can also be another option to prepare you for uncertainties (know more about OFW Compulsory Insurance here). Setting up a retirement fund can also help you start in case an unexpected event happens.

3) Always be wise with your spending. 

Working overseas means you have access to things you don’t normally find in the Philippines. Since you are earning more (and in dollars), you might be tempted to buy anything you could find and send it back home.

If you are serious about protecting your hard-earned money, then you need to be wise with your spending. Here’s what you can do:

  • Always set aside a portion of your money according to your expenses.
  • Avoid sending the biggest chunk of your money for remittance.
  • Consider packed lunch instead of buying food from restaurants.
  • Don’t focus on material things. Your family doesn’t need new shoes every month.
  • Share a room with fellow Filipinos to save on rent (in case housing is not part of your benefits).

In other words, be disciplined with your money and spend it wisely.

4) Avoid the “I deserve this” mentality. 

You sacrificed a lot for your family, to the point of leaving them behind and work overseas. You forego your own happiness just to give them a better future. So if you see that watch you’ve been eyeing for years, it’s okay to buy them since you deserve to reward yourself for all the sacrifices you made.

Here’s the thing: sometimes, the “I deserve this” mentality could go out of control. You might end up spending too much on certain things since you deserve it for all the hard work you did. If this continues, you might find yourself going back home with little to no money on your pocket – and you surely don’t want that to happen.

The bottom line is this: working overseas is never going to be easy. Protect your money by investing on you and your family’s future and not on what will make everyone in the family happy – for now.

Common Business Questions Asked by OFWs

Working overseas is not forever. There will come a time when your contract will expire, or you’ll get sick and required to go home, or the country where you’re working will experience crisis, prompting you and the thousands of Filipinos to go home. Before that happens, you want to make sure that you are prepared – and by prepared, bear in mind that savings is not enough.

What’s your plan B? Put up your own business.

Here’s the thing: starting your own business can be tricky. Check out the most common business questions asked by OFWs and use this as a guide when you decide to start your own business too:

1) What is the best business for OFWs? 

It depends. There is no right or wrong idea when it comes to business. You can start with food carts, or sell your own tried-and-tested recipes, be an Uber or Grab driver, build your own poultry farm, or even star with a sari-sari store.

To help you determine the best business for you, it is imperative that you find out what you are most passionate about. The more you like what you’re doing, the higher the chances of sticking to your business, which equates to growth as well.

You may check this post for some business ideas you can do for additional income.

2) Can I avail of a loan even if I’m abroad? 

Yes and no.

If you are working abroad, you may still apply for a loan through a representative. This chosen representative must have a Special Power of Attorney (SPA) authorizing him/her to transact and process the loan on your behalf. This SPA must be executed and certified in the Philippine Embassy or Consulate where you are located to make it binding.

On the other hand, some lenders require physical appearance to allow you to avail of a loan. They will require you to sign certain documents as the principal lender. Still, it is best to raise this concern directly to your chosen lender to be sure.

3) What if we don’t have an asset we can use as a collateral, what can we do? 

Many lenders, especially banks, require any form of asset to guarantee the loan. It could be your land, house, car, or if allowed, the fruits of your existing business. By offering one of your assets as a collateral, it would give lenders a peace of mind, knowing that they can go after something in case you are unable to pay.

What if you don’t have any asset to offer? You can still avail of a loan by doing any of the two:

  • Apply with a co-maker. A co-maker is someone who can help you pay off your loan in case of default, even if he does neither receive nor benefit from the loan. Check this link to know more about the role of a co-maker.
  • Go for a non-collateral loan. This type of loan is not backed up by any form of security. Nonetheless, you might pay higher interest rate every month. Read this post  to learn more about this type of loan.

4) How much money can I borrow? 

This depends on your capacity to pay and the collateral you will offer. The higher your income and the higher the value of the assessed property, the higher the amount you can borrow.

Here’s the thing: many OFWs ask for more. For instance, if you are earning P50,000 every month and the assessed value of the property you are offering for collateral is only P300,000, then don’t expect you can get a P1 million loan. Be realistic with the loanable value, otherwise, your application can be rejected.

5) What are the requirements I need to submit? 

This one will depend on the lender. Each lender has its own set of requirements, which you need to comply with in order to proceed with your loan application. This includes:

  • Duly accomplished application form provided by the lender
  • At least one government-issued ID
  • Latest Employment Contract, Certificate of Employment, or POEA Contract for land-based workers or Seaman’s Book for seafarers, whichever is applicable
  • At least three months-worth of payslip or any other proof of income
  • Marriage contract, if married

Make sure to ask your chosen lender about the requirements needed for your loan application. Submit them completely to speed up the processing of your loan application.

6) Can I use the Business Loan for other purpose? 

Ideally, no. The purpose of business loan is to help you with working capital, in case you are just starting out, or to finance business expansion or to provide additional working capital for those with existing business.

There are specific loan products available according to your needs. Take advantage of those products since lenders treat them differently.

7) I have an existing business. Can I still apply for a business loan? 

Yes. In fact, business loans recognize the possibility of expansion or the need for additional working capital. Even if you have an existing business, you may still apply for a business loan as long as you meet the requirements.

Got more questions? Let us know in the comments section below.

6 Loan Repayment Tips for OFWs

Credit card. Personal loan. Salary loan. Housing loan. Car loan. 5-6. Whatever you want to call it, one way or another, you owe someone some money and you need to pay them ASAP. Since you are earning in dollars, it will be easier for you to pay off your family’s loans – or not.

If you happen to be swimming in debt or prevent yourself from taking a dip in the pool of loans and monthly amortizations, this one is for you. Check out these tips on how to repay your loan without being broke:

1) Start with a payment plan. 

Before anything else, you need to plan on how you will repay your debts. To do this, write down the lenders and the corresponding amount and interest rate you owe them. List the due dates as well to help you keep track of what loan needs to be prioritized.

Through listing, you will be able to determine what loan needs your attention and immediate payment. It could be the loan with the earliest deadline or the one with the higher interest rate. If you have the more than one loan under the same lender, consider consolidating them if possible to save on interest charges. You may also start paying the loan with the smallest amount since it will be easier to pay off it off, plus it’s one loan off your list.

2) Identify unnecessary expenses. 

Do you really need to buy a new pair of shoes for your son or send a balikbayan box full of goodies for your family back home even if you just sent one two months ago? Think about the money you can use to pay off your loan instead of spending it on things that won’t last.

To repay your loan, it is compulsory that you remove unnecessary expenses. The money you are able to save can be used to minimize your loan and save yourself from a massive headache. It’s a small sacrifice that is worth it.

3) Don’t think about savings – yet.

How can you save if you have debts to pay?

At this point, you need to prioritize loan repayment and getting out of debt first. You won’t be able to grow your money and maximize your earnings if there are lenders going after you every month. Use the money for savings to reduce your loan and once you are able to pay off most of them, that’s the time you can start with your savings.

4) Borrowing money to pay off your borrowed money is a big NO-NO. 

Admit it. You are tempted to go to loan sharks just to pay off your loans (and eventually avoid a stain on your credit score). Unfortunately, this won’t do you any good.

Regardless if it’s a loan shark, friends who agreed to lend you money, or another legitimate lender, borrowing money to pay your debts is a big no-no. It will only add another loan on your list and you’re not doing yourself any favors as well.

5) Get a sideline.

In a previous post, we shared about the different business ideas you can try even while working abroad. Why not try it and who knows, it could be a success.

It doesn’t matter how small the amount you will get from your sideline. The good news is you can use this additional income to help you pay your loans without borrowing money from other people. You’ll never know, but this could be a good start for something bigger too.

6) If you can pay bigger, then pay bigger. 

Lenders will give you a payment schedule showing the amount of payment you should make every month. Don’t just settle with the amount set forth on the plan. If possible, pay more. You will not only be able to reduce the interest rate charged on your loan but also it could make loan repayment faster.

At the end of the day, what matters most is you acknowledge your debts and you do something to repay them as soon as you can. Repaying your debt won’t happen overnight, but if you are consistent with your payment, you won’t notice that you are now down to the last centavo.