Maricor Bunal
Seafarers, like other Filipinos working overseas for foreign employers, are often thought to be rolling in cash. But that is far from the truth. Even if an OFW is earning big money, family obligations can drain their wallets. Good thing there are financial institutions that extend a Seaman Loan.
Several of them offer quick loan processing for OFWs, including seafarers. But it is still important to learn a thing or two about seaman loan. You have to fully understand what it entails to enter into an agreement to avail of an OFW loan
Quick Information About Seaman Loan
Eligibility
The requirements you must meet to qualify for a seafarer loan, which can vary among lenders. For OFW loans, you should be 21 to 60 years old by the time the loan matures. Whether you are land-based or sea-based, you need an Overseas Employment Certificate. If you are sea-based, you have to show your Seafarers Registration Certificate. You also need to show your passport, working visa, proof of residence such as a utility bill, valid ID that is issued by the government and your employment contract.
You need to provide the latest picture, marriage certificate, birth certificate/s of child/ren and other documents deemed necessary by the lender.
Specific to pay on board and self-allottee salary type. Here are additional requirements aside from the above:
- Must reside in an owned house
- Submit supporting documents to show proof of residency
- Have an immediate relative as co-borrower. The co-borrower must have a regular source of income or regularly employed or owns a business or property.
Interest rate
Either variable (adjustable) or fixed. The fixed rate means that it is the same for the entire duration of the loan. The variable interest rate changes according to market movement. A fixed rate can be from 3% to about 5%.
Security or collateral
Some lenders require a collateral as a guarantee that you will pay the loan. It has to be a tangible asset such a bank deposits, business earnings, bonds, stocks, vehicle or real property. Collateral is normally required for larger loans such as for business or housing.
Loan term
The length of time for you to pay back the loan, which can vary from 30 days to several years.
Credit standing
This refers to your reputation for meeting or repaying your financial obligations. If you are a good payer, loans are usually approved quickly.
Processing fee
This is sometimes called the loan application fee. It is a small charge that can be deducted from the total loan amount or added to the amount you must pay monthly.
Payment terms
This is how you are to pay the loan. It can be through automatic debit agreement linked to your bank account. Some companies prefer that you issue post-dated checks to cover the principal loan amount and the interests. You can also do it by direct remittance to the corporate bank account of the lender.
Tempting as it is, it is best to apply for a loan that you can actually pay. Most lenders extend seafarer loans of up to twice your monthly salary. Land-based OFW can pay loans between 6 and 18 months while sea-based OFWs can pay their loans within 3-8 months. This can be extended to 9 months but it mostly depends on the duration of your contract of service with your employer.
Requirements to Secure a Seaman Loan
To avail of a Seaman Loan, you need the following:
1. valid IDs
2. 2×2 photo
3. original Proof of Billing
4. Proof of Remittance/Allotment Slip
5. Latest Contract of Deployment
6. Passport/Seaman’s Book/Seafarer’s Registration Certificate
7. Allotment Slip/Certification of Allotment
The great news is that a Seaman Loan is most of the time processed within 1-2 days. So you and your family can already benefit from the cash the soonest possible time.
