An Overseas Filipino Workers Guide to Getting and Repaying a Loan

Overseas Filipino Workers (OFWs) are significant contributors to the country’s economy. According to the PEW research center, more than U.S. $31 billion was sent to the Philippines in remittances from other countries in 2016. Data released by Bangko Sentral ng Pilipinas puts incoming personal remittances during the same period at over U.S. $29 billion. Unfortunately, this does not translate into financial stability for all those who work outside the country.

If you, like many other OFWs, hope to get a loan, you get different options from which to choose, provided you meet some basic eligibility criteria. What’s important, though, is that you stick to trusted and dependable lenders, and steer clear of loan sharks who provide loans at exorbitant interest rates.

What Kinds of Loans Can You Get?

Depending on your needs, you may apply for a personal loan, an auto loan, a home loan, or even a business loan. OFWs might qualify for one or more of the following kinds of loans:

Pinoy abroad loan. You apply for this loan as an OFW and the financial institution disburses the loan proceeds to the co-maker who resides in the Philippines. This, typically, is the applicant’s spouse.
First-time OFW loan. This loan is for OFWs leaving the country for the first time. Processing time is quicker than usual if you provide all relevant documents such as your work contracts and visa.
Allottee loan. In this case, while an OFW remains the primary borrower, an allottee – usually a family member – is the applicant.
Balik-mangagawa loan. Balikbayans who are in the country on vacation or are in between jobs but have valid work contracts may apply. While your physical presence is required, you still need a co-maker.
Balikbayan loan. These loans are specifically for OFWs who have permanently returned to the Philippines.
Seafarer loan. You may apply as a first-time seaman or a balikbayan, no matter whether you’re onboard, ready to depart, or in the country on vacation.

Eligibility Criteria

You may have to meet different eligibility criteria depending on the kind of loan you want and the financial institution you approach. Some basic criteria remain the same:

You are in between 21 and 61 years of age.
Unless applying for a first-time OFW loan, you have been working overseas for a minimum of two years.
You have a good credit history and have not defaulted on loans in the past.
You earn at least ₱10,000 per month, or its equivalent in U.S. dollars.
Your monthly income should be at least two times the loan’s equated monthly installment (EMI).
Some lenders require that you have a residential address in the Philippines with a functioning landline phone number.

Who Lends to OFWs?

Finding lenders that provides loans to OFWs is straightforward, and in some cases you can even begin the application process online. While you can turn to government agencies to meet your needs, several private banks provide OFW loans as well. Some of your options include:

The Philippine Social Security System (SSS)
The Home Development Mutual Fund (Pag-IBIG)
Philippine National Bank (PNB)
BDO Unibank (BDO)
Land Bank of the Philippines
East West Bank
Philippine Savings Bank (PSBank)
Bank of the Philippine Islands (BPI)
Chinabank
United Coconut Planters Bank (UCPB)

Making Repayments

If you plan to make repayments toward your OFW loan from outside of the Philippines, turn to a specialist money transfer company instead of a bank. This is because the former score over the latter when it comes to exchange rates and transfer fees. Besides, overseas money transfer companies let you lock in exchange rates and schedule transfers according to your needs. Some of the prominent money transfer companies that let you send money to the Philippines include TransferWise, WorldRemit, OFX, WorldFirst, and XE Trade.

Conclusion

IF you meet some basic eligibility criteria, you can get an OFW loan for a variety of reasons. Before you do, make sure you compare your alternatives well. When time comes to repay your loan, choosing the right method may lead to noticeable savings.