How to Choose the Best OFW Loan to Fulfill Your Dreams
An OFW loan is one of the best options to start owning your dream home, driving your own car, or setting up your target business. You can even get a diploma through personal cash loans that could fund online education or that could pay for skills enhancement tuition. Loans seem risky but applying for the right loan offer from a competitive and reputable lending institution can help you turn the desires of your heart into something concrete and worthwhile.
Let GoBear help you choose the best OFW loans without falling prey to expensive loan sharks that rob you of your hard-earned cash.
What to look for in a loan?
Here are a few things you should look out for when applying for OFW loans:
The interest rate is the amount charged by the lender against money lent to a borrower. Interest rates are usually expressed in percentage and are categorized as follows:
• A simple Interest rate refers to the total interest generated by multiplying the principal amount by the interest rate and the loan duration
Simple interest rate = principal x interest rate x time
= Php50,000 x 1.75 x 12
= Php875 per month x 12 (the rest needs to change)
• A compound interest rate is also known as interest on interest and is not only applied to the principal amount but is also added to the accumulated interest charges from previous periods.
Year Principal Amount Interest (20% per year) Total Amount Owed
1 50,000 10,000 60,000
2 60,000 12,000 72,000
3 72,000 14,400 86,400
At the end of three years, the total interest paid for the loaned amount of Php50,000 is Php36,400 at 20% interest per annum.
Fees and charges
The overall cost of a loan is also affected by the imposed fees and charges of the lender. A competitive loan amount balances both the interest rates and the fees to ensure that you will not pay so much more than what you actually borrowed.
Lenders usually ask you to pay the following on top of your loan amount:
• Processing fee - The entire loan process comes with a cost including administrative fees and credit checks. Some banks deduct the processing fees directly from the loaned amount, while some add it on to the total loan proceeds, allowing borrowers to get the approved amount in full.
• Documentary stamp - The payment for a documentary stamp is required by the Bureau of Internal Revenue and is equal to Php1.50 per Php200 of loaned amount. If you borrowed Php20,000, the documentary stamp fee is Php150.00
• Late repayment fee - Lenders impose a late repayment charge once you fail to pay on or before the due date. In the Philippines, banks and other lending institutions charge an average of 3%-10% penalty for late repayments.
• Returned check fee - If you decide to pay with checks, then make sure these are funded to avoid paying a minimum of Php1,000 for returned or bounced checks. Note that some lending institutions do not require checks for repayment.
• Early repayment fee - You might think that paying off your loan before its maturity could save you more, but lenders apply Early repayment fees or pre-termination fees ranging from 4-8%.
Loan requirements vary from one lender to another. For Global Dominion Financing Incorporated, OFW loan applications include the following:
Principal Borrower requirements:
- Latest Contract of Employment
- Copy of VISA
- Photocopy of OEC (POEA Overseas Employment Certificate)
- A plane ticket or Flight Details
- Latest Electric or Water Bill.
- Proof of Remittance (for Balik-Mangagawa)
- Immediate relative (Spouse, Parents, Siblings)
- Any 2 valid ID’s
- Marriage contract (if married)
- 2 Valid IDs
- 2 pcs. 2×2 picture
- Latest and Original Electric or Water bill
Global Dominion Financing Incorporated doesn’t just offer OFW loans for emergencies but also for you to start turning your dreams into reality. With an interest rate of 1.75% per month, you can loan up to 200% of your monthly income and finance your goals.
Apply for GDFI OFW Loan in three easy steps:
- Fill out the form – Based on the information you provided in the application form, GDFI will search for specific solutions to meet your needs
- Get approval – After submission of all required documents, wait for a loan advisor to contact you to complete the document processing and verification
- Get your money – Once approved, you can claim your loan from any GDFI branch
GDFI has made financing one of the most sensible options for overseas workers like you to realize your goals even when you’re miles away from home.