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5 Qualities of a Good and Responsible Borrower

Everybody wants a good, reliable, and trustworthy lenders. You want to make sure that we get the right treatment and service. After all, you are helping them earn, right?

Here’s the thing: lenders want good, reliable, and responsible borrowers too. This explains why credit standing is very important. It is the lender’s way of determining how responsible you are in paying your financial obligations. If you are serious about proving your worthiness, you need to possess the following qualities: 

1) Self-awareness

If there is anyone who knows you better, then that is you. Being a good borrower entails self-awareness, especially in terms of financial aspects. You should be aware of how much money you are making, the areas you need additional help, and the amount of money you currently have. Before you apply for any loan, make sure you look into your financials first and determine whether you really need additional funds or not.

2) Responsible

Nothing would make lenders happy than having a responsible borrower. It doesn’t matter how much money you borrowed. Banks would like to see that you are willing to take responsibility of your obligations and how you handle your loans, whether past or current ones, is a testament to that.

What does it take to be a responsible borrower? Apart from being organized, being a responsible borrower also means finding ways to overcome struggles instead of using these personal issues as an excuse to default in payments. Don’t use the “delay in remittance” excuse, too.

3) Disciplined 

Aside from being responsible, a good borrower is also a disciplined borrower. You know whether or not you need credit by differentiating needs from wants. You are also a disciplined borrower by taking note of your expenses, not giving in to requests from your extended relatives, saving for things that matter, and finding areas you can cut back in order to pay for your existing loan obligations.

4) Timely 

You know what your obligations are and even willing to cut back on certain expenses to be able to pay the loan obligation. Still, this doesn’t end there. You need to be able to pay on time, whether paying amortizations or the full amount of the loan, in order for banks to consider you as a good borrower.

5) Trustworthy 

You want to get a loan from someone you can trust. In return, lending companies want borrowers who they can trust as well.

Lenders extended credit at your disposal. Make sure to pay them back on the agreed time. The next time you needed funds, they will be glad to help you again.

With these qualities, are you a good borrower? If yes, then keep it up. If not, then don’t worry. You still have time to adopt these qualities and turn yourself into a good, if not great borrower.

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Understanding the Role of Co-Maker When Applying for a Loan

Have you tried applying for a loan? As a rule, the applicant is the principal borrower where the loan will be coursed through, unless otherwise stated.

Let’s say that you are already 60 years old or you have unstable income at the time you applied for a loan. Lending companies don’t discriminate based on age or the income bracket you belong to, but they will require you to have a co-maker, preferably your sibling or child above 18 years, to apply for a loan and improve your chances of approval.

What is a co-maker? What are the responsibilities of being a co-maker? Will he or she be liable to pay for the loan too? Read on to find out.

Understanding Co-Maker a Little Bit Better 

By definition, co-maker is a person who, by virtue of contract, promises to pay the loan of another in case of default. He or she is often used when you apply for a collateral loan and when the borrower is unable to meet certain credit criteria such as age or insufficient proof of income. By having a co-maker, you can increase the amount of loan and boost chances of approval, especially if the co-maker is in good credit standing and has sufficient income.

As a co-maker, he or she does not receive or benefit from the proceeds of the loan. Nonetheless, one is responsible in ensuring that the full amount of the loan including interests are paid.

Assuming that you defaulted payment and your co-maker was made to pay the loan. Does he or she have any right of reimbursement from you? The answer is yes. The co-maker can demand reimbursement from the principal borrower for all the payments made in relation to the loan.

Co-Borrower versus Co-Maker

Don’t mistake co-maker with co-borrower. The nature may be the same, but a co-borrower is more common on non-collateral loan and often billed to pay for the monthly loan amortization in case the principal failed to make any payment.

In other words, the obligation to pay commenced at the start of the loan and has benefitted from the proceeds.

Various Reasons Why You Need a Co-Maker:

  • To assure lenders that the loan will be paid no matter what happens
  • Get a higher loanable amount
  • Improve chances of loan approval despite limited to no income or low-value collateral
  • Gain the lender’s trust, which could potentially improve your credit standing
  • Additional assistance to pay the loan amortization
  • Prevent foreclosure of your property in case you are unable to pay your loan

The key is to choose a co-maker that has a stable source of income and with good credit standing. Unfortunately, not everyone are willing to be a co-maker. Even if someone can back you up to pay for your loan, make sure to do everything that you can to fulfill your loan obligations and don’t pass the burden to someone.

Check out this reminder to the public posted by Bangko Sentral ng Pilipinas regarding being a co-maker.

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7 Best Savings Account for OFWs

You can always invest your money in stocks, mutual fund, and even government bonds. If you have enough capital, you can even put up your own business and stay in the Philippines for good. Before you achieve your goals, you need to start with one thing: a savings account.

Check out the savings account offered by major banks and find out which one suits you best:

1) BPI Savings 

One of the largest banks in the Philippines, BPI offers variety of savings products for Overseas Filipino Workers. You can start with opening a BPI Express Teller account, an ATM-savings account that allows you to remit money anywhere in the world.

If you want faster returns on deposits and higher interest rates, you can open BPI Advance Savings Account or Maxi-Saver. The BPI Pamana Savings is also ideal because it comes with free insurance for up to P2 million.

You can monitor your savings through online banking system or mobile banking to make things more convenient for you.

2) BDO Kabayan Savings

If you are coursing your remittances through BDO Remit, then it’s time to open BDO Kabayan savings account. With only P100 or $100 initial deposit, you get to save and enjoy the benefits offered by the bank specifically for OFWs. You may also qualify for zero maintaining balance as long as you remit at least once a year. Boost your savings too, so you can qualify for free life and accident insurance.

In case you might need a loan, having a BDO Kabayan Savings could help increase your chances if you apply in BDO.

3) Metrobank OFW Peso Savings

If you want no initial deposit and zero maintaining balance when opening an account, then Metrobank could help. The OFW Peso Savings account allows you to open an account without any money in your pocket. Plus, your savings account earns money through interest and allows you to access it anytime, anywhere.

Don’t worry. You get to enjoy other benefits such as make fund transfer, pay the bills, or check your account.

4) PSBank Overseas Filipino Savings 

A subsidiary of Metrobank, PS Bank also offers savings products for OFWs through the Overseas Filipino Savings. It is a fixed interest bearing account with no initial minimum and maintaining balance. Remitting money to your loved ones back home is easy  and checking your account is convenient through its PSBank online facility. You get to earn interest at P5,000, unlike other banks that need P10,000 amount on your account.

5) PNB OFW Savings Account

PNB may be one of the oldest and most stable banks in the country, but they are able to prove that they can adapt to the changing times, including having a savings account facility for OFWs. The OFW Savings Account has zero opening and maintaining balance and provides special ATM card for the OFW and beneficiaries.

In case you need to open an account fast, avail of their Take One Kit. It contains the ATM card and forms you need to fill out so you don’t have to wait for your ATM to arrive.

6) Chinabank Overseas Kababayan Savings

The Overseas Kababayan Savings is another options you need to consider when opening a savings account. Apart from the no initial deposit and no maintaining account, you only need P1,000 balance to be able to earn interest. You can also course your remittances through this account since you can access it in all BancNet POS, apart from the branch, mobile, and online services.

7) Bank of Commerce Sikap Pinoy OFW Account

This type of facility is offered specifically for OFWs and their beneficiaries. Initial deposit and maintaining balance are waived while P5,000 minimum balance is required to earn interest in your account. You also get a customized ATM card and can access your account in all BancNet ATMs.

What are you waiting for? Take your pick!

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5 Reasons Why You Should Borrow Money from Private Lending Companies

There are instances when you will need money to finance certain needs of the family. Apparently, your salary as OFW is not enough to purchase in full your dream house or finance the business you plan to put up. That’s okay. You can always turn to banks to help you finance your needs (with interest, of course).

Apparently, traditional banks are not your only option in case you want to apply for a loan. Over the years, private and independent lending companies are on the rise, giving not just OFWs but also potential customers more options in terms of lending.

The next question is this: which is better, traditional banks or private lending companies?

Here are reasons why you need to consider private lenders too:

1) Easier and faster approval

All lending companies, whether traditional banks or private lenders, are regulated by the Bangko Sentral ng Pilipinas (BSP). Nonetheless, banks follow stricter regulations and implementations that reduces the chances of small and starting business owners to put up their business.

This is why private lending companies can be helpful. Approval is easier and faster because of the lesser restrictions and requirements imposed.

2) More affordable loan processing fees

Between banks and private lenders, the former has lower interest rates. Here’s the catch: banks can be opportunistic and look for other ways to earn money. At times, they get it from processing fees.

That’s not all. Banks would often deduct the fees from the loanable amount. This means if you borrowed P100,000, you won’t get the amount in full since the fees were already deducted.

This is a different case when you apply in private lenders. Private lending companies like Balikbayad has affordable processing fees and will not deduct the fees in the amount you borrowed.

3) Offers competitive rates 

Banks will say that their interest rates are lower. That’s true. On the other hand, private lending companies provide competitive rates that will suit your financial needs and capacity to pay. The rates may not be lower than what banks offer, but as long as you use the money in the right investment, you won’t even notice the difference.

4) Loan terms are customized according to borrower’s needs

Traditional banks are often subjected to both internal and external audit. This is why it is important that all the requirements set forth by the Monetary Board are complied with. Any lacking documents could delay your loan application and even compromise approval.

This is a different case for private lenders. Loan requirements can be patterned according to borrower – as long as the basic requirements are met such as age and proof of income. In other words, requirements are more flexible and easier to comply with.

5) A good boost in credit history

Banks are strict when it comes to credit history. Anything negative in your credit score could make them think twice on whether or not you are worthy of credit. Thankfully, private lending companies look at it differently, although credit score still matters.

The good thing about borrowing money from private lending institutions is that it allows you to boost your credit history. Just make sure you will fulfill your financial obligations by paying on time and in full and your are good to go.

In case you are looking for a private lending company, consider Balikbayad among your options. It makes lending easier and more affordable for every OFW.

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What You Need to Know When Sending Money to Your Family in the Philippines

You all have your own reasons why you work abroad. At the end of the day, one of the goals is to send money to your family in the Philippines. After all, all the sacrifices and hard work are for your family as well.

Here’s the challenge: finding a reliable money remittance center that will ensure that the hard-earned money you will send will reach your family’s hands safe, sound, and complete up to the last centavo. There are many fly-by-night remittance centers that take advantage of the OFW’s situation and you don’t want your money to end up with them.

Don’t worry. Here’s a guide on how, what, where, and when you should send money to your loved ones back home:

Choose a reliable and convenient remittance partner

Back in the day, there are few options available that allows OFW to send money back to the Philippines. With the advancement in technology, the options are endless.

The safest way to send money back home is through ATM service or bank remittance. All you have to do is to deposit money on any Philippine banks and your loved ones can get the money upon withdrawal. BDO, BPI, PNB, and Metrobank are some of the stable and reputable banks you can use to facilitate money remittance. Convenience and accessibility are also a big plus, so make sure you consider that when choosing a remittance partner.

Aside from banks, here are your other options:

  • MoneyGram, which offers home delivery, cash pick-up, ATM service through LBC ATM Card, or online transfer.
  • Western Union Philippines, although the fees can be more expensive compared to other remittance options.
  • Xoom Money Transfer, wherein although money transfer is safe and fast, the exchange rate is lower and it will take time before your family will receive the money.
  • TransferWise, which is cheaper than Xoom and transfers money using real-time exchange rate.
  • Online transfer services such as Paypal wherein transfer is real-time, but fees may be higher and exchange rate is lower than the actual.

Take note of the current exchange rate 

This is crucial. The exchange rate now is different two days ago, which is why it is important to pay attention to the trend. After all, it could affect the amount of money you will be sending and a few centavos could make a difference.

It may be tricky to do this since it requires strict monitoring and you may not have enough time to do so. Nonetheless, pay attention to what is going on around you since it will help you determine whether it is best to hold on or remit your hard-earned money.

Postal service is a big no-no

There will always be a risk of losing money while in transit and you surely don’t want that to happen. At the same time, it will take time before it reaches your loved ones.

Maximize your mobile phone

Let’s say you don’t have access to Internet all the time. That’s fine. You can always rely on your mobile phone to send money to your family. Globe and Smart has remittance services for OFWs that allows you to remit within a few clicks. This way, you can still send money anytime, anywhere.

Always compare the services available

From the list of remittance partners enumerated above, it only shows that there are lots of options you can choose from. Before you decide on anything, make sure to compare the services offered by remittance centers. Know their policies on exchange rates, remittance fees, speed of transfer, and convenience to help you decide which is the best remittance partner for you.

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Loan Basics You Need to Know Before You Apply

There are tons of loan facilities available for OFWs that will suit your needs – from purchasing your first car to buying your new home to even putting up your own business. Whatever your needs are, one thing is for sure: you will always encounter the same loan terms in every application.

Before you apply for a loan, make sure you familiarize yourself with these terms and concepts:

Eligibility

This refers to the requirements you need to meet in order to qualify for a loan. Eligibility requirements vary from lender to lender. Nonetheless, the most basic requirements, especially for OFW Loan includes:

  • At least 21 to 60 years old at the time of the loan maturity
  • Overseas Employment Certificate (for both land-based and sea-based workers) or Seafarers Registration Certificate (for sea-based workers)
  • Passport
  • Working Visa
  • Proof of Residence such as electric bill
  • Valid and government-issued ID
  • Employment Contract

There are several lending companies that accepts these requirements such as Balikbayad. Nonetheless, check the eligibility requirements needed by lending companies before you apply to speed up the processing of your application.

Interest Rate

There are two kinds of interest rates: fixed and variable or adjustable.

Fixed rate remains constant. This means if your initial rate is at 8%, it will remain 8% the entire duration of the loan, regardless of the changes in the market. On the other hand, variable rate is based on the prevailing standard market rate and changes over time.

The type of interest rate depends on the nature of your loan.

Security or Collateral 

In the context of loans, security or collateral is any asset used to guarantee the payment of the loan. It can be a real property (land, house, or condominium unit), chattel (car), stocks, bonds, goods or fruits of the business, deposits, or any other assets with monetary value.

A collateral is necessary especially if you are applying for a housing loan or business loan. On the other hand, personal loans and credit card application are examples of unsecured loans and do not need collateral.

Read more about secured and unsecured loans here.

Loan Term

This refers to the duration of your loan in which you have to pay back before the term ends. Depending on your loan facility, loan term can be as short as 30 days to even 15 or 20 years.

Credit Standing

Also referred to as credit score, credit standing is your reputation for repaying or meeting your financial obligations. The higher and the better your credit score is, the more willing a lender will be in financing your cash flow needs.

Before you apply for a loan, it is important to look into your credit standing first. This will help you check whether you are credit-worthy or not. Don’t worry. There are many ways to help you boost your credit score and get your loan approved. You can learn more about it in this post.

Processing Fee

Every lending company charges its clients with a fee for the processing of loan application. This is called processing fee or loan application fee.

Some lending companies deduct the processing fee on the total loanable amount. For instance, if you borrowed P10,000, you cannot get the amount in full because fees were deducted. On the other hand, there are lending companies such as Balikbayad that deduct the fees on the monthly installment.

Payment Terms 

This refers to the manner and mode of payment for your loan.

For convenience, most lending companies recommend automatic debit arrangement wherein your account is linked. Some require issuance of post-dated checks that will cover the entire amount including interests or remit directly to the lender’s corporate bank account.

Payments are also done in a monthly basis. Make sure that you are able to pay on time to prevent issues in the future.

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What You Need to Know about Emergency Fund (And Tips on How to Set It Up)

They say being an OFW is not forever. That’s true. There will come a time when you need to go back home and look for another opportunity to work abroad and sustain your family and their needs. There are also instances when you need to go back home due to existing conflict in the country where you’re working or you will be sent back home due to unforeseen circumstances.

This is why it is important to have an emergency fund – to help you start from something due to events that you didn’t see coming.

Read on to find out everything you need to know about emergency fund, plus tips on how to set it up.

What is an Emergency Fund?

As the name suggests, an emergency fund is an account specifically for unforeseen, unplanned situations. These situations could be a major illness, loss of job, or a major expense. Experts suggest that regardless of your socio-economic class, everyone needs an emergency fund because you will never know what will happen.

There are various channels that could help you set up your emergency account. You can open a savings or checking account specifically for that purpose, money market account, or even keep money in a safe (although this is not advisable due to proximity and convenience).

Tips on How to Set Up Your Emergency Fund

1) Think ahead. The purpose of an emergency fund is to ensure that you have something to sustain you for the next few months until you are able to get back on your feet. In setting up your emergency fund, make sure to think ahead. Imagine much it would be, the amount you need to allocate every month, and how long your fund will last (preferably at least six months) and work for it.

2) Make it liquid and accessible. Emergency fund is used for emergency purposes. Therefore, it should be liquid and accessible. Savings or checking account is the most feasible option since both are highly liquid and can be withdrawn easily.

3) It should be automatic. In order to make it work, your emergency fund must be filled regularly. Make your contributions automatic and pay for the amount lost in case you forgot to deposit on certain months. If you can enroll your emergency fund account in online banking, then link it with your other accounts to make transfer easier.

4) Maximize loose change. Only few people would love to carry around a bag full of coins. Make use of those loose change by adding them in your emergency fund. You might even be surprised with how much money these coins could add in your account.

5) Evaluate spending choices. Do you really need to open all the lights when you’re sleeping? Do you always order more than what you can consume and finish in restaurants? How many times do you have to take the cab than ride the train or walk? These simple acts seem harmless, but you end up paying more. Take a look at your spending and lifestyle habits, get rid of wasted money, and contribute it in your emergency fund.

More importantly, let your emergency fund be. Let this fund serve its purpose and don’t use the money to cover for your family’s material expenses.

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4 Reasons Why You Need to Apply for OWWA Loan

Being an Overseas Filipino Worker is not forever. No matter how long you work abroad, there will always be a bigger possibility of going back and settling in the Philippines. If you happen to work in countries that are experiencing war or political conflict like Syria, the Philippine government will order mandatory repatriation, forcing you to go home.

To prepare for that, many OFWs decide to open up their own business, no matter how small it is, to help them earn money for the family. Apparently, not many OFWs have enough capital that will help in starting your own business.

This is where OWWA Loan Program comes in.

1) A reliable business partner. The government recognizes the hard work of all OFWs. Despite earning in dollars, they know that you will need extra help when the time comes and you will decide to open your own business. The The OWWA Loan for OFW helps finance your business needs for up to P2 million so you can get back on your feet and have a sustainable source of income for your family. This way, you don’t have to go back abroad to work.

2) The Enterprise Development Training. Apart from the amount you will receive to finance your business, you will be required to undergo Enterprise Development Training or EDT. In fact, this is one of the mandatory requirements you need to comply with to get your loan approved.

This training covers what you need to know about starting, managing, and sustaining a business. You will also have project-specific training or immersion according to the business you plan to put up and make a business plan, which will be submitted together with other requirements for OWWA Loan. The EDT ensures that you are equipped with the necessary knowledge and skills to help you succeed in your entrepreneurial journey.

Read more about EDT here.

3) Variety of business allowed. Another good thing about OWWA Loan is that it is applicable to various kinds of business. Construction, rental services, service or trading, franchising, transport, and health care are among the allowable businesses. Aside from that, you will also have a better understanding of your chosen field through the Enterprise Development Training.

4) Specifically tailored for OFWs. There are various banks and lending institutions that have facilities for OFWs. Apparently, there are few that caters to OFW and their business needs. The Philippine OWWA Loan is one of them and it is intended to support every OFW’s ability to succeed in the field of entrepreneurship.

Keep in mind that OWWA Loan for OFW is there to assist you in starting your business. The success will depend on you, so make sure you choose a field that will suit not just your needs but your interests as well.

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6 Pasalubong Tips and Tricks for OFWs Going Home

“Uy, pasalubong ah!” 

How many times do you have to hear this phrase every time you go home for a vacation or during Christmas season? Surely, a lot of times. Whether or not it’s the season of giving, giving pasalubong to your family (and even relatives and friends), is mandatory and expected. After all, you are earning in dollars.

Does this mean you should use a big chunk of your money buying the latest gadgets and other material things to keep your family happy? The answer is NO.

Here are tips you need to remember when buying pasalubong for your family members:

1) Always set a budget. This is the first step you need to do when buying something for your loved ones back home. Setting a budget allows you to take note of your expenses without hurting your wallet. Just make sure you will stick to it since what’s the purpose of setting a budget if you won’t follow it?

2) Make a list. Apart from making a budget, a list would help you a lot in shopping for gifts for your family back in the Philippines, especially if you belong in a big family. A list helps you keep track of what to buy and its corresponding receiver; thus preventing you from missing out people.

This leads you to the next pasalubong tip.

3) Consider the preference or interest of your recipient. Each person in the family will want something that is different from the others. Instead of guessing and assuming, it is best to ask your family about what they want to receive from you. This way, you are sure that what you gave is appreciated and the money you used to buy it won’t go to waste.

4) Buy something meaningful. It is easy to buy generic things like keychain, refrigerator magnets, or purses for everyone. The question is will they like it? This is why it is important to ask and make a list because you want your family to appreciate what you gave. At the same time, you are sure that they will use it and not just toss it somewhere in the house.

5) Don’t make promises you can’t keep. You know what your kids want and your mother even requested something from you for the first time. While buying something for the family is a good gesture, do not make promises if you can’t buy them. Be honest about your finances and remind your family that you might not be able to buy everything because you are on a budget.

6) Never feel obligated to give. Pressure will always get into your system and feel obligated to buy something for your family and even extended family. Bring yourself back to Tip No. 1 and remind yourself why you are working overseas. It is not your responsibility to fulfill the material needs of everyone in the family just to keep them happy. Set aside something for yourself and for your future instead of focusing on material possessions that will fade, deteriorate, or get damaged overtime.

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Learn to Say No: 5 Tips on How to Handle Your Extended Family’s Requests

“Baka pwedeng humiram ng konti, pang-tuition lang ng pinsan mo.” “Okay lang ba pautang? Bayaran ko kaagad. May sakit lang kasi si Tito Junior mo.” “Kumikita ka naman ng dollars diba? Hiram sana ako kasi nagipit kami sa upa. Tutal naman kami nag-aalaga sa nanay mo.”

These seem familiar, don’t you think? If you are working overseas, you will often find yourself hearing these statements not just from your immediate family but also your relatives. By relatives, this means tito, tita, cousins, grandparents, nieces, nephews, and other people that are not your siblings, parents, spouse, or children.

Since you are earning bigger, your relatives expect you to “support” them, whether directly or indirectly. You are now the designated breadwinner of the entire family. Surely, you don’t want to be labeled as selfish and you want to save yourself from guilt, so you give in – even if it means using a chunk from your savings. The challenge now is how to say no without hurting their feelings.

Here’s what you can do to limit your remittances to your extended family and achieve financial independence:

Tip No. 1: Remember why you are working abroad.

There is a reason why you are working abroad. It could be saving for a better home, helping your younger siblings to finish school, or preparing for retirements. Whatever your reasons are, keep them in mind and never forget. These goals will be your guide and constant reminder that you are working for yourself and your family’s sake and not for everyone else.

Tip No. 2: Never mind the pressure.

Admit it. Getting that Facebook message from your aunt asking if you could lend her money can be dreadful. As much as you want to say no, you feel the pressure to make a quick decision and say yes – even if it means taking a chunk from your savings.

Don’t let pressure dictate your decision, which leads you to the next tip.

Tip No. 3: Decline respectfully. 

Saying no must be done in a proper and respectful manner. After all, relatives are relatives and they can be someone you can rely on, especially if you are overseas. Instead of shouting at them or a writing a big “NO” on Facebook messenger and blocking them after, decline nicely. Explain in a nice manner why you can’t lend them, which brings you to this next tip.

Tip No. 4: Be firm about your decision. 

Surely, your tito and tita will constantly bug you to lend them money until you give in. Once you say no, make sure to be firm with your decision. Don’t let pressure get into your head and give in to their demands. Further, tell them that as much as you want to help, you are not in a better position to lend them money.

Tip No. 5: The “No Loan” policy must apply to everyone. 

There will always be a favorite tita, cousin, or niece in the family. On the other hand, you have relatives that you just can’t stand. Regardless of their place in your heart and judgment, make sure that the “No Loan” policy applies to ALL relatives. Lending money to one relative and saying no to the other could cause conflict in the family (and a discussion in the future) – and you don’t want that to happen.

You might say it is easier said than done. That’s true. Once you start to be firm with your decision, you will start not feeling responsible for covering and paying for your extended family’s finances. Think of yourself for a minute and remember why you are working overseas.