OFW Loan Options: How To Get Funds For A Home, Automobile, And More

20 min. read By eCompareMo on

Overseas Filipino Workers (OFWs) who find themselves needing extra cash can turn to OFW loans.

To help our hardworking OFWs make the most of their money and not get trapped in debt, let’s take a closer look at the best OFW loan options available.

According to a recent report by the World Bank, the Philippines is one of the highest recipients of remittances at $33.8 billion for the entire 2018. This translates to around ten percent of the country’s gross domestic product.

While families can rely on their expatriate family members to provide for them, who will look after OFWs when in their direst financial needs? Fortunately, there are numerous institutions that will be more than willing to assist them through numerous loan products.

To help OFWs pick the loan products that will suit their needs the best, we’ve compiled some of the most common OFW loan options currently offered in the market.

OFW Loans from Banks

Banks offer an extensive selection of consumer loan solutions depending on their needs. In the following section, we’re going to look at various loans specifically designed to cater to the needs of OFWs that are offered by major banks in the Philippines.

BDO

BDO offers several loan options for OFWs. They provide both unsecured and secured loans. They also offer OFW loans for specific purposes.

Read on to find out more about the different BDO OFW loan options, their requirements, and how to apply.

1. BDO Kabayan Loan (Unsecured)

Specially designed for overseas workers, the BDO Kabayan Loan is a multi-purpose loan that can be taken out by OFWs even without any form of collateral.

What will be needed, however, is a BDO savings account. If a loan application is successful, the money will be delivered straight to the existing savings account. So, before applying for this type of loan, you need to open a BDO savings account.

Minimum Amount of Loan: P10,000 Maximum Amount of Loan: P500,000 Minimum Loan Tenure: 6 months Maximum Loan Tenure: 36 months Early Repayment: None Remarks: Unsecured Loan for OFWs

Terms and interest rates

Loan terms Factor rate Monthly add-on rate Effective interest rate
6 months 0.186667698 2% 40.05%
12 months 0.103336822 2% 41.71%
18 months 0.07556043 2% 41.51%
24 months 0.061669382 2% 40.89%
36 months 0.047778078 2% 39.43%

Loan eligibility

  • At least 25 years old and below 65 years old before loan maturity
  • One of the following in terms of citizenship eligibility:
    • Former Filipinos with or without dual citizenship
    • Filipinos married to foreigners
    • Filipinos based abroad or OFWs and their beneficiaries
  • Employed for at least two years continuously or three years continuously for domestic helpers
  • Living or working in a company that has at least one fixed landline telephone
  • Earning a gross monthly income of at least P10,000 or its US dollar equivalent
  • For applicants who prefer having beneficiaries to receive their loan proceeds, they must meet the following:
    • Must be living in an area serviceable by BDO (within 30 kilometers of any BDO branch)
    • Must submit an accomplished beneficiary information form
    • Must have an authorization letter for beneficiary signed by the OFW applicant

Meanwhile, sea-based, unskilled workers, and domestic helpers must meet the following criteria to apply for a loan:

  • At least 25 years old and below 65 years old before loan maturity
  • Must be Filipino
  • At least three years employed continuously or serving at least a three-year contract
  • Place of employment or residence must have at least one fixed landline telephone
  • Earning a gross monthly income of at least P10,000 or its US dollar equivalent
  • For applicants who prefer having beneficiaries to receive their loan proceeds, they must meet the following:
    • Must be living in an area serviceable by BDO (within 30 kilometers of any BDO branch)
    • Must submit an accomplished beneficiary information form
    • Must have an authorization letter for beneficiary signed by the OFW applicant

For both types of applicants, they must have no bad credit history with the Bankers Association of the Philippines’ Negative File Information System due to previously defaulted loans.

How to apply

To apply for a BDO Kabayan Loan – Unsecured, you must submit the following documents to any BDO branch in the Philippines, which are all available in the bank’s website:

  • Application form
  • Deed of assignment
  • Special power of attorney
  • Auto-debit arrangement form
  • Beneficiary information form

(Read: A Complete Guide To OFW Loan Approval)

2. BDO Kabayan Loan (Secured)

For OFWs who make it a habit to put some of their earnings in a savings account, you can get a more favorable loan product from BDO through the Kabayan Loan – Secured.

With lower interest rates because the risks are lower, you can get a competitive edge anytime you need to finance something.

Minimum Amount of Loan: P10,000 Maximum Amount of Loan: P3,000,000 Minimum Loan Tenure: 6 months Maximum Loan Tenure: 36 months Early Repayment: None Remarks: OFW loan secured by borrower’s deposit account

Terms and interest rates

Loan terms Factor rate Monthly add-on rate Effective interest rate
6 months 0.175067218 0.84% 17.08%
12 months 0.091237975 0.79% 17.07%
18 months 0.063358579 0.78% 17.06%
24 months 0.049471099 0.78% 17.06%
36 months 0.035682596 0.79% 17.06%

Loan eligibility

  • At least 25 years old and below 65 years old before loan maturity
  • One of the following in terms of citizenship eligibility:
    • Former Filipinos with or without dual citizenship
    • Filipinos married to foreigners
    • Filipinos based abroad or OFWs and their beneficiaries
  • Employed for at least two years continuously or three years continuously for domestic helpers
  • Living or working in a company that has at least one fixed landline telephone
  • Earning a gross monthly income of at least P10,000 or its US dollar equivalent
  • For applicants who prefer having beneficiaries to receive their loan proceeds, they must meet the following:
    • Must be living in an area serviceable by BDO (within 30 kilometers of any BDO branch)
    • Must submit an accomplished beneficiary information form
    • Must have an authorization letter for beneficiary signed by the OFW applicant

Meanwhile, sea-based, unskilled workers, and domestic helpers must meet the following criteria to apply for a loan:

  • At least 25 years old and below 65 years old before loan maturity
  • Must be Filipino
  • At least three years employed continuously or serving at least a three-year contract
  • Place of employment or residence must have at least one fixed landline telephone
  • Earning a gross monthly income of at least P10,000 or its US dollar equivalent
  • For applicants who prefer having beneficiaries to receive their loan proceeds, they must meet the following:
    • Must be living in an area serviceable by BDO (within 30 kilometers of any BDO branch)
    • Must submit an accomplished beneficiary information form
    • Must have an authorization letter for beneficiary signed by the OFW applicant

For both types of applicants, they must have no bad credit history in the Bankers Association of the Philippines’ Negative File Information System due to previously defaulted loans.

How to apply

Applicants of BDO Kabayan Loan – Secured must successfully accomplish the following forms to apply for the said loan product:

  • Application form
  • Authorization form
  • Auto-debit arrangement form
  • Beneficiary information form

For those who are opting for a secured loan for OFWs from BDO, keep in mind that you can only borrow up to 90 percent of your peso savings account and 80 percent of your dollar savings account.

(Read: INFOGRAPHIC: Guide To OFW Loans)

3. BDO Kabayan Auto Loan

If you’re an overseas worker and you want to invest your hard-earned money in your dream car, the BDO Kabayan Auto Loan is the best loan option for you.

With more convenient payment programs and easy application, it won’t be long before you finally become a car owner.

Maximum Loanable Amount: 80 percent of a car’s total value Minimum Loan Tenure: 36 months Maximum Loan Tenure: 60 months Early Repayment: None Remarks: Auto loan specifically designed for OFWs

Terms and interest rates

Loan terms Effective interest rate
36 months 10.69%
48 months 10.78%
60 months 10.93%

Loan eligibility

To become eligible for a BDO Kabayan Auto Loan, overseas applicants must meet the following criteria:

  • Must be at least 21 years old or 70 before the loan reaches its maturity date
  • Must meet the minimum annual income of P600,000 for the entire household or P50,000 gross monthly income
  • Must be employed for at least two to three years or has an employment contract that lasts for up to three years
  • Must be a Filipino citizen

How to apply

  1. Fill out the BDO Kabayan Auto Loan application form
  2. Prepare one valid ID such as the following:
    • Passport
    • Driver’s license
    • SSS ID
    • PRC ID
    • OWWA ID
    • OFW ID
    • Seaman’s book
  3. Prepare other documentary requirements for overseas workers:
    • Proof of remittance for the last three months
    • Latest crew contract for sea-based applicants
    • Consularized certificate of employment with income
    • Latest three months’ pay slips
  4. For those who want to claim their loan proceed through a beneficiary, the spouse in the Philippines can submit an affidavit of marital consent to transact on behalf of the OFW

4. BDO Kabayan Home Loan

Plant your roots and finally settle down with the help of BDO Kabayan Home Loan. Engineered to cater to overseas workers who want to put their money into the home of their dreams, it’s time to put your hard-earned money into something substantial.

Minimum Amount of Loan: P500,000 Maximum Amount of Loan: P100,000,000 Minimum Loan Tenure: 12 months Maximum Loan Tenure: 240 months Maximum Fixed Period: 60 months

Terms and interest rates

Fixed period terms and interest rates:

Fixed period Interest rate
1 year 6.50%
2 years 7.25%
3 years 7.50%
4 years 8.00%
5 years 8.00%

Eligibility

OFW applicants of BDO Kabayan Home loan should be able to meet the following criteria:

  • Must be at least 21 years old or 70 before the loan reaches its maturity date
  • Must meet the minimum annual income of P600,000 for the entire household or P50,000 gross monthly income
  • Must be employed for at least two to three years or has an employment contract that lasts for up to three years
  • Must have a fixed landline telephone at the place of residence or employment
  • Must be a Filipino citizen

How to apply

  1. Fill out the BDO Kabayan Home Loan application form
  2. Prepare one valid ID such as the following:
    • Passport
    • Driver’s license
    • SSS ID
    • PRC ID
    • OWWA ID
    • OFW ID
    • Seaman’s book
  3. Prepare other documentary requirements for overseas workers:
    • Proof of remittance for the last three months
    • Latest crew contract for sea-based applicants
    • Consularized certificate of employment with income
    • Latest three months’ payslips
  4. For those who want to claim their loan proceed through a beneficiary, the spouse in the Philippines can submit an affidavit of marital consent to transact on behalf of the OFW
  5. For applicants who are applying for home loan to finance construction or renovate their homes, they must submit the following documents:
    • Building/floor plan of the proposed improvement
    • Bill of materials
    • Building specifications of the proposed finishes

Philippine National Bank

PNB

PNB offers two loans specifically for OFWs. The OFW loan options with this bank are purpose-focused, they are granted for OFWs looking for extra money for vehicle purchases or housing purposes.

Take note, however, that PNB OFW loans are only granted to applicants who are stationed in specific countries. Read on to find out more about who’s eligible and how to apply.

1. PNB Global Filipino Auto Loan

The PNB Global Filipino Auto Loan is the perfect vehicle loan solution for OFWs that are stationed in Saudi Arabia and Hong Kong.

Maximum Loanable Amount: 80 percent of a car’s total value Minimum Loan Tenure: 12 months Maximum Loan Tenure: 60 months\ Early Repayment: None Remarks: Car loan for OFWs in Saudi Arabia and Hong Kong only

Eligibility

Potential PNB Global Filipino Auto Loan borrowers must first meet the following criteria before they can apply for this product:

  • Must be at least 21 years old and will not be 60 years old upon the loan’s maturity date
  • Must have been consistently employed overseas for the last two years

How to apply

To apply for this product, you need to submit the following requirements:

  • Signed application form with ID picture
  • Special power of attorney (SPA), duly authenticated by the embassy
  • Authenticated contract of employment or
  • Authenticated pay slip
  • Certified statement of income and expenses

Overseas applicants can submit their application form as well as other requirements through the PNB offices in Hong Kong and Saudi Arabia.

(Read: Bank Vs. Dealer Financing: Which Car Loan Option Is Better For You?)

2. PNB Own a Philippine Home OFW Housing Loan

Are you an OFW based in Singapore, Japan, New York, or Los Angeles? Through PNB Own a Philippine Home, you can finally purchase a home and pay for it using the local currency!

Product overview

For OFWs based in New York

Maximum Loanable Amount: 60 percent of the appraised value of lots, 80 for house and lots, 80 percent for improvement and construction of a lot, 80 percent for reimbursement or acquisition of construction costs, 80 percent for loan takeouts Maximum Loan Tenure: 300 months for the financing of house and lot, townhouse, condominium unit, apartment unit, and house construction; 120 months for the financing of lot purchase or home improvement Early Repayment: None Remarks: Housing loan for OFWs based in New York with repayments in either US dollar or Philippine peso

For OFWs based in Los Angeles

Maximum Loanable Amount: 60 percent of the appraised value of lots, 80 for house and lots, 80 percent for improvement and construction of a lot, 80 percent for reimbursement or acquisition of construction costs, 80 percent for loan takeouts Maximum Loan Tenure: 300 months for the financing of house and lot, townhouse, condominium unit, apartment unit, and house construction; 120 months for the financing of lot purchase or home improvement Early Repayment: None Remarks: Housing loan for OFWs based in Los Angeles with repayments in either US dollar or Philippine peso

For OFWs based in Japan

Maximum Loanable Amount: 60 percent of the appraised value of lots, 80 for house and lots, 80 percent for improvement and construction of a lot, 80 percent for reimbursement or acquisition of construction costs, 80 percent for loan takeouts; or P500,000 for lots and P1,000,000 for house and lot Maximum Loan Tenure: 300 months for the financing of house and lot, townhouse, condominium unit, apartment unit, and house construction; 120 months for the financing of lot purchase or home improvement Early Repayment: None Remarks: Housing loan for OFWs based in New York with repayments in Japanese yen or Philippine peso

For OFWs based in Singapore

Maximum Loanable Amount: 60 percent of appraised value of lots, 80 for house and lots, 80 percent for improvement and construction of a lot, 80 percent for reimbursement or acquisition of construction costs, 80 percent for loan takeouts; or P500,000 for lots and P1,000,000 for house and lot Maximum Loan Tenure: 300 months for financing of house and lot, townhouse, condominium unit, apartment unit, and house construction; 120 months for financing of lot purchase or home improvement Early Repayment: None Remarks: Housing loan for OFWs based in Singapore k with repayments in US dollar or Philippine peso

Terms and interest rates

  • For OFWs based in Japan, the annual interest rate will be based on the prevailing Japanese yen long-term prime rate issued by the Mizuho Corporate Bank, plus five percent fixed spread that’s subject to reset every year
  • For others, interest rates will be provided by PNB upon request
  • For all subsectors of the loan, maximum terms will be the following:
    • 300 months for house and lot, townhouse, condominium unit, apartment unit, and house construction
    • 120 months for lot purchase and home improvement

How to apply

For New York and Los Angeles applicants, prepare the following documents:

  • Application documents:
    • Accomplished OPHL loan application form
    • Copy of valid IDs
    • Acceptable US FICO score of at least 650 and credit history
    • $200 non-refundable processing fee
    • $150 appraisal fee
  • Income documents:
    • Photocopy of income tax returns with all attachments such as IRS W-2 forms for the last two years
    • For employed applicants, copies of pay slips for the past two months
    • For self-employed applicants, audited financial statements for the last three years
    • Bank statements for the last two consecutive months, with the months matching the ones indicated on the play slips
  • Collateral documents:
    • Copy of title
    • Copy of tax declaration on land and/or improvement acquisition from accredited developers
    • Contract to sell
  • House construction or renovation documents:
    • Bill of materials and estimates of construction and labor costs signed by a civil engineer or architect
    • Floor plan and building specification signed by a civil engineer or architect

For Japan applicants, prepare the following documents:

  • Accomplished OPHL loan application form
  • Passport size photo
  • Copy of passport
  • For non-Japanese applicants, copy of residence card
  • For Japanese applicants, copy of driver’s license
  • Original copy of certificate of employment with the following details:
    • Commencement date of employment
    • Current salary
    • Current position
  • For self-employed individuals, business registration certificate
  • Income tax returns or withholding tax certificates for the past two years
  • For self-employed individuals, tax payment receipts for the past two years
  • Proof of income such as pay slips for the last three months prior to application
  • Marriage certificate
  • Residence certificate
  • For applicants purchasing a property, copy of one of the following:
    • Purchase agreement
    • Reservation agreement
    • Contract to sell with a statement of account
  • For applicants taking out a loan for construction and/or improvements:
    • Bill of materials and estimates of construction and labor costs signed by a civil engineer or architect
    • Floor plan and building specification signed by a civil engineer or architect
    • Building permit from the city engineering office

For Singapore applicants, prepare the following documents:

  • Application documents:
    • Accomplished OPHL loan application form
    • Singapore-issued valid ID
    • Philippine passport
    • Latest passport size photo
    • For married applicants, marriage contract
    • Credit report from Credit Bureau Singapore
    • $150 non-refundable processing fee
  • Income documents:
    • Certificate of employment with the following details:
      • Commencement date of employment
      • Current salary
      • Current position
    • Income tax returns or withholding tax certificates for the past two years issued by the Inland Revenue of Singapore
    • Income tax returns or withholding tax certificates for the past two years
    • Bank deposit and loan account statements for the past three months, if applicable
  • Collateral documents:
    • Copy of title
    • Copy of tax declaration on land and/or improvement acquisition from accredited developers
    • Contract to sell
  • House construction or renovation documents:
    • Bill of materials and estimates of construction and labor costs signed by a civil engineer or architect
    • Floor plan and building specification signed by a civil engineer or architect

China Bank

Chinabank

China Bank may not be as big as the banks previously mentioned, but they’re one of the institutions that have competitive housing and auto loan solutions for migrant workers.

1. China Bank Overseas Kabayayan Services HomePlus Loan

Maximum Loanable Amount: Up to 80 percent of the appraised value of the property or between P500,000 and P25,000,000 depending on the borrower’s capacity for repayment Maximum Loan Tenure: Up to 300 months for a house and lot purchase, 180 months for vacant lots, and 120 months for condominium units Early Repayment: None Remarks: China Bank’s home loan solution designed with the OFWs in mind

Eligibility

Before you even apply for a China Bank HomePlus Loan for OFWs, make sure that you meet the following criteria first:

  • Must be a Filipino citizen; for foreigners planning to buy a condominium unit, must have been a resident in the country for at least three years
  • Must be at least 21 years old and will not be 65 years old upon the loan’s maturity date
  • Must have been consistently employed overseas for the last two years
  • Must be engaged in a profitable business if self-employed
  • Must have an income of at least P30,000

Terms and interest rates

  • Interest rates are provided by China Bank upon request
  • For payment terms, the maximum tenure depends on the type of property:
    • 25 years for house and lot
    • 15 years for vacant lots
    • 10 years for condominium units

How to apply

For faster application of China Bank’s HomePlus Loan, make sure you already have the following requirements on hand:

  • Basic documents:
    • Accomplished application form for China Bank HomePlus Loan
    • Two government issued valid IDs
    • Latest income tax return (BIR Form 2316 for individuals and Form 1702 for partnerships and corporations)
    • Marriage contract for married applicants
  • Additional requirements:
    • Certificate of employment and POEA contract
    • Proof of remittance and pay slip for the last six months
    • Consularized special power of attorney
  • Collateral requirements:
    • Copy of transfer or condominium certificate of title
    • Vicinity or location map and lot plan
    • Current tax declarations for the property
    • Current real estate tax receipts
  • Miscellaneous requirements:
    • For purchase of property:
      • Contract to sell or reservation agreement or conditional deed of sale
      • Statement of account
      • Deed of assignment or title for designated parking lot
    • For home construction, renovation, or improvement:
      • Floor and building plans
      • Cost estimates and material specifications
    • For refinancing:
      • Statement of account
      • Bank ledgers and official receipt of loan payments for three months

Once you’ve completed your application form, pertinent documents, prepare a non-refundable filing fee of P3,500 and go to any China Bank branch in the country to proceed with your HomePlus Loan application.

(Read: Property Buying Guide for OFWs: 5 Steps To Buying Your Own Home)

2. China Bank Overseas Kababayan Services AutoPlus Loan

Maximum Loanable Amount: Up to 80 percent of a vehicle’s purchase price or at least P250,000 Maximum Loan Tenure: Up to 60 months for new vehicles or 36 months for pre-owned cars Early Repayment: None Remarks: China Bank’s home loan solution designed with the OFWs in mind

Terms and interest rates

  • Although the interest rate for China Bank’s auto loan for OFWs is only available upon request, the bank promises fixed-rate interest for the whole term
  • Meanwhile, the following terms are available to applicants depending on the type of car to be purchased:
    • For brand-new cars, between one year and five years
    • For second-hand vehicles, borrowers can get an auto loan of up to three years

Eligibility

Before you even apply for a China Bank Kababayan Services AutoPlus Loan, make sure that you meet the following criteria first:

  • Must be a Filipino citizen; for foreigners, must have been a resident in the country for at least two years
  • Must be at least 21 years old and will not be 65 years old upon the loan’s maturity date
  • Must have been consistently employed overseas for the last two years

How to apply

Prepare the following documents first:

  • Basic documents:
    • Accomplished application form for China Bank AutoPlus Loan
    • Two government issued valid IDs
    • Marriage contract for married applicants
    • If applicable, BIR Form 2316 for employed individuals and Form 1702 for partnerships and corporations
  • Additional requirements:
    • Certificate of employment and POEA contract
    • Proof of remittance and pay slip for the last six months
    • Consularized special power of attorney
    • If applicable, SEC papers such as SEC certificate, articles of incorporation, by-laws, etc.

Once you’ve completed the following requirements, you can submit them all to any China Bank branch near you.

(Read: What To Do When Your Car Loan Gets Rejected: A Step-By-Step Guide)

Land Bank of the Philippines

Landbank

Despite being a government-owned banking institution, the Land Bank of the Philippines has its ears to the gFor their OFW clients, the bank has prepared a home loan that makes ownership of real property more accessible to Filipinos. round and knows which sectors require better financial products. They provide a home loan to OFWs.

1. Landbank Bahay Para sa Bagong Bayani Home Loan

For their OFW clients, the bank has prepared a home loan that makes ownership of real property more accessible to Filipinos.

Maximum Loanable Amount: Up to 80 percent of the appraised value of the property Maximum Loan Tenure: Up to 240 months for OFWs with co-borrower and 180 months for OFWs without co-borrower Early Repayment: None Remarks:The government bank’s home loan product for OFWs

Terms and interest rates

  • Actual interest rates are available upon request but according to Landbank’s website, interest rates can be either variable and subject to yearly repricing and fixed based on the terms of payment availed by the applicant.
  • For the terms of payment, OFW applicants can either get a maximum payment term of up to 20 years with a co-borrower and 15 years without a co-borrower.

Eligibility

If you meet the following eligibility criteria, you can proceed to apply for Landbank’s Bahay Para sa Bagong Bayani loan:

  • Must be a Filipino citizen
  • Must have a live contract with a reputable country
  • Must be at least 21 years old and not more than 65 during the maturity of the loan
  • Must have a good credit standing

How to apply

To apply for Landbank’s housing loan, you need to prepare the following documents:

  • For credit analysis:
    • Accomplished application form
    • 1×1 photo
    • Copy of the applicant’s employment contract
  • For appraisal:
    • Photocopy of transfer certificate of title (TCT) or condominium certificate of title (CCT)
    • Photocopy of tax declaration
    • Most recent real estate tax receipts
    • Certification from a licensed geodetic engineer
    • Lot plan
    • Location and vicinity map
  • For construction and renovation:
    • Photocopy of TCT or CCT

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