5 Reasons Why OFWs Borrow Money

You heard it countless times already – save, save, and always save. OFW life is uncertain and there is always a risk that you might be forced to go home due to unforeseen events. There could also be issues back home that could force you to take three or four jobs to cover the expenses.

No matter how hard you budget and save, your account doesn’t seem to grow. Yet, needs (and wants, which should not always be prioritized) never seem to end. You will always need a house, a new car that will replaced the decades old you have on the garage, prepare for your kids’ education, and the list goes on.

What do you do when your funds are not enough? You borrow money.

Check out the common reasons why OFWs borrow money:

Your family back home needs it. 

This is the most common reason why many OFWs borrow money, sometimes even resorting to loan sharks. As harsh as it sounds, OFWs became the instant ATMs for their family – and even extended family – back in the Philippines. They assume that since you are earning in dollars, you earn a lot. Little do they know the sacrifices you need to make just to fulfill their needs and capriciousness. After all, this is your way of making up to them and the time lost.

Education

Tuition fee doesn’t come cheap. When it comes to your kids’ education, you are willing to make necessary sacrifices, including borrowing money, to ensure that they will get quality education.

The good news is you can prepare for this early. The earlier you save up for your child’s education, the easier for you once your child starts schooling.

Medical Emergencies

Nobody wants to get sick. No one wants to get into an accident. Even if your hospital expenses will be covered by your employer, that benefit does not extend to your family members. There is also a chance that the expenses will not be fully covered, which means you need to shell out your own money as well. In case one of your family members are sick, you have to pay for the expenses straight from your pocket.

In case you don’t have enough funds to cover for the expenses, you tend to resort to lenders. It could be a good way to augment expenses,

In other words, applying for a loan is not all that bad, especially if there is a legitimate reason to borrow. When you do, make sure you could pay on time. Otherwise, it could destroy your credit score, thereby affecting future loan applications.

Purchase of Home, Vehicle, or Any Other Asset

A decent house in Metro Manila will cost you millions. Depending on the model you chose, a car will also have a tag price of millions. In other words, buying possible assets will cost you a lot of money – and applying for a loan is a good way to get that.

You have to be careful on this. Since this involves millions, you have to prepare yourself in paying monthly amortization. It is advisable that you make a bigger down payment so you could reduce the costs every month.

Business 

One of the best products of your hard work overseas is by having your own business. Regardless if you go back overseas or not, having a business, no matter how small it is, gives additional income to your family. You can use the earnings to cover monthly expenses.

Apparently, putting up your own business means you need funds to make it happen. If you don’t have sufficient amount yet and you believe that your product or service could help make the world, then getting a loan would be feasible to make that entrepreneurial dream happen.

Speaking of loan, Balikbayad is here to help with your cash needs. Simply fill out our online application form or download the Balikbayad app on Google Play Store to apply.