Our banking expert on which financial products overseas Filipino workers are eligible to apply for.
Q: I’ve been working as an IT consultant in Singapore for five years now. I’m confident that I can already start my own business in the Philippines in a few years’ time. However, I don’t know if banks will allow me to get a loan or a credit card even if I’m working here. Do banks accept applications from overseas workers to apply for products like credit cards or loans? –Ramil Martinez, Singapore
A: Banks run rigorous background checks on all loan and credit card applicants to ensure their creditworthiness. Despite the potential for higher pay and better job stability, this process doesn’t exempt Filipinos who are working overseas.
While OFWs can apply for bank loans that can be used for car and home financing, they are not allowed to send an application for credit cards and personal loan products issued in the Philippines. According to our resident banking expert Darl Emas, unfortunately, credit card and personal loans are not offered to OFWs because they are unsecured.
“It will be hard to run after them and settle their payments once they defaulted their repayments,” says Darl. “Since credit cards and personal loans are unsecured, the banks have no collateral to use in case they become delinquent clients. How will the banks ask them to pay their debts if they’re not here.”
How OFWs can apply for a loan
For housing loan and auto loan applications, banks require applicants to send a number requirements for verification purposes. While this isn’t the actual credit investigation yet, they will start their investigation upon receiving the following documents:
• Valid IDs
• Certificate of employment
• BIR form 2316
• Payslip issued by the applicant’s employer
For overseas Filipino workers who want to apply for a car loan or home loan, applicants can grant a special power of attorney (SPA) to an eligible representative. “The purpose of the SPA is to allow the applicant to have a representative so that the former need not make a personal appearance at the bank,” Darl says.
“Aside from the SPA, the overseas applicant also has to send their contract of employment consularized by the consul office where he is working,” she adds.
Once these documents are given to the authorized representative, the person bearing the applicant’s SPA can now take care of the application on behalf of the overseas applicant.
Additionally, OFWs can always shield their hard-earned assets with an insurance coverage.