Category: OFW Interest

There are two types of loan in terms of security: collateral or non-collateral loan. Collateral loan means the loan is guaranteed by a security, which could be in the form of real estate, chattel, time deposits, or goods. On the other hand, Non-collateral loan is not backed up by any form of security.

Between the two, lenders prefer collateral loan. This gives them an assurance that whatever happens, they will be repaid since an asset is tied on the loan.

Here comes the tricky part: not all OFWs have property or any form of asset that they can use as collateral.

What’s your next option? You can apply with a co-maker or co-borrower.

If you can’t get a reliable co-borrower, then consider Non-Collateral OFW Loan and here’s why:

1) It is a low-risk option than secured loans. 

Imagine getting your car or house re-possessed just because you are unable to pay a loan. Stressful, don’t you think?

This won’t happen when you apply for a non-collateral loan. It is a low-risk option because your assets are not compromised. Nonetheless, it may take a while for banks to approve your loan since they will need to conduct verification procedures to make sure they can extend credit to you safely.

2) Requirements are easier to comply with. 

You don’t need to submit Tax Declaration, original title of the property, tax receipts, or sign any documents to guarantee your loan. In fact, non-collateral OFW Loan calls for requirements that are easier to comply with such as Proof of Income and billing address to verify where you live. Since they are easier to comply with, you can submit it anytime and it won’t compromise the length of loan application process.

3) A quick solution to your cash needs. 

There are cases when you will need cash and be able to pay it in less than a year. In that case, a non-collateral loan can be your good option. It is easier and faster to process without compromising your finances or savings.

Despite these benefits, keep in mind that non-collateral loan usually have higher interest rate because of higher risk of non-payment. The good news is there are lenders like Balikbayad that offers competitive rates and easier repayment options to make it less stressful for you.

Give us a call or send us a message to know more about what we can offer. We love to help you with your cash needs.

Working overseas is not easy. There are lots of uncertainties and you will never know what could happen to you while you’re there. You also need to attend trainings, process documents, and ensure that your family is safe and secure while you are abroad.

Accomplishing many things can be overwhelming, especially before you leave. Don’t worry. These crucial steps, including how to manage finances, will help you prepare before you leave:

1) Complete your travel documents. 

Before you leave, make sure you fill out completely and prepare all your travel documents, including passport and VISA. After all, any mistake not only costs you time but also money since processing fees are doubled.

You might sat that your employer will shoulder the processing costs. Fine. Still, completing all travel documents beforehand saves you against hassle and wasted time.

2) Make sure you have emergency money. 

Many new OFWs are guilty of this: no pocket money.

Keep in mind that when you are deployed to another country to start a new job, you don’t have money or income for at least one month. Even if you received your income after a month, that won’t be enough to help you survive since you might end up sending most of your money back home, coupled with the challenges of establishing your finances abroad.

If you can, save at least two months-worth of salary. This will give you enough buffer as you go through the adjustment period. You may also want to avail of an OFW Loan from Balikbayad to help you as you settle abroad.

3) Establish a budget – and how much money you will send back home. 

Earning in dollars does not always guarantee a good life. To make sure you can live a good life, you need to plan your spending and establish a budget, remittance included.

Before you leave, make sure you research about the cost of living in your country destination. Maximize the information you can find online to help you prepare for the expenses, including food, transportation, and rent (in case accommodation is not included).

Since you are in the process of setting up your budget, make sure to include monthly remittance as well. When it comes to remittances, it is important to establish not only how much money you will send back home but also the remittance provider you will use that will give you more savings.

Check this post to know more about remittance tips. 

4) Take care of your existing financial obligations. 

Did you borrow money from a relative? Did you apply for a loan to pay off your child’s tuition fee? Whatever financial obligations you have, make sure to do your best to pay them off before you leave. This will save you and your family against financial distress too.

Short in cash? Then consider getting a loan from private trusted lenders like Balikbayad. You get to enjoy low interest rate too.

5) Setup a bank account in the Philippines. 

This is important. Several banks such as BPI and BDO offer savings account facilities for OFW, which you can also use for remittance purposes. Setting up a bank account allows you to manage your income, transfer money with ease, and even pay bills even if you are thousands of miles away. It’s more convenient too.

Check out this post to learn about the banks that offer Savings Account with Remittance feature.

Keep in mind that preparation goes a long way. Take note of these five tips and you are on your way to a less stressful transition when working overseas.  

This post is intended for the family members of OFWs. 

According to the survey conducted by the Bangko Sentral ng Pilipinas, fewer OFW families save, with 96.6 percent of OFW households relying heavily on remittances. In fact, the money received from abroad are used to pay for basic needs, which showed that the money remitted to them are their main source of cash.

This could be dangerous, especially when you look into the long-term aspect. Being an Overseas Filipino Worker, although yields higher income, is still full of uncertainty. This is why the BSP recommended putting money in the banks since remittances not only  fuels domestic consumption but also helps finance other productive sectors in the economy.

How can you do that? Here’s how:

1) Start by discussing the Family Dynamics. 

This is the first step you need to do as a family. Schedule one day so you can sit down as a family and discuss how to handle the money you will receive from the OFW member. You already have an idea how much money your OFW member is making, so agree on how much money you will receive, how much will be alloted for savings, and who else can contribute to augment the daily needs of the family. Abled members must also work and not just rely on the remittances.

By doing this, you are not only helping your OFW member in financing the family’s needs but also being sensitive about his/her personal needs as well.

2) Look for alternative ways to earn money. 

Every OFW family, no matter how big the OFW is earning, must not rely on the family member working abroad alone. Since you already discussed and laid down rules on what to do as a family, look for opportunities that allow you to grow money.

You can open a sari-sari store or engage in buy-and-sell of goods like clothes or toys. If anyone in the family has a special skill, say baking or crafting, use it as an opportunity to earn money. There are many options. Be creative and think of ways on how to help.

3) Budgeting is key. 

You already agreed as to how much you should get every month. At this point, you already identified what you can do to increase your cash flow. The next step is to set a budget.

Every month, set aside portion of the remitted money plus other cash sources to basic needs – utilities, grocery, allowances, and savings. Consider tracking all expenses, no matter how small the amount is, so you will know where to cut down. Building a realistic budget doesn’t happen overnight, so make sure you do this religiously.

4) Discuss the future. 

Being an OFW is not forever. At some point, the OFW member in the family will come home and realize that there are limited opportunities for him/her abroad. Before that happens, make sure you established your future plans as a family.

There is not perfect formula when discussing your future plans. It could involve a new house, new car, P1 million in the bank account, or a sustainable business, whatever depends on the family.

Keep in mind that achieving financial freedom as a family is a team effort. One cannot drive a car without gas in it. Help the OFW member in the family by doing the tips enumerated above and you will worry less about the future in no time.

The qualities of a good borrower was discussed in a separate post. Now that you know the qualities you should possess and to eventually increase your chances of getting a loan approval, it’s time to say hello to the qualities a good – if not great – lender should possess.

This includes the following:

1) Has Sufficient Lending Limit 

Imagine this: you are in the middle of expanding your mini-grocery business and you need enough working capital to make this work. When you go to your lender, they tell you that they cannot accommodate your loan because they don;’t have sufficient funds. It’s a bad sign, don’t you think?

Therefore, make sure you go for someone who is stable and willing to lend a higher amount. Otherwise, time to move on to another lender.

2) Flexible 

Banks and other lending companies follow specific guidelines prescribed by the Bangko Sentral ng Pilipinas. In fact, they are subjected to regular audit to make sure they comply with the requirements.

Still, go for a lender that can provide flexibility in financing terms. They should be able to offer you terms that are within your capability without breaking any rule, whether lowering your interest rate or extending the maturity of your loan by one month.

3) Responsive

Bank terms can be intimidating and confusing for the laymen. This is why don’t hesitate to ask questions if you cannot understand something. A good lender should be patient enough to explain what the loan is about and every little detail in it. He/she must give you a walk-through of what the loan is about, including benefits and risks. A good lender must be able to answer your concerns, no matter how negative it might be, to help you determine if you are making a right choice. .

4) Unparalleled Reputation 

Are you willing to lend money from someone with negative reviews? Do you want to borrow money from Lender A who was involved in a scam few years ago?

Reputation is important when it comes to choosing the best lender. You want someone who is reliable, trustworthy, and have a positive feedback from other customers.

In addition, make sure to maximize Facebook and other social media channels to check the credibility of the lender you are eyeing for. The good thing abotu social media is that people can easily give their firsthand experience about the service and treatment. This will make it easier to see how other clients were treated and how the loan application was also processed.

5) Experience 

Apart from reputation and credibility, the lender’s track record or experience is also crucial in determining whether a lender is good or not.

By experience, this means a lender must be in the industry for years, knows the in and out of loans, and equipped with necessary and sufficient knowledge to address your needs. After all, the more experienced a lender is, the better it will be for the lender to handle your financial needs.

6) Partner and Not Just a Lender

Lenders often think highly of themselves because of their abilities and skills. This is not a good sign because a good lender must see themselves as your strategic partner. Aside from helping you find financial means, a good lender also provides management assistance that could further improve your business. They should offer services that allows you to deepen your knowledge and grow your money. After all, having a sustainable and self-sufficient business will benefit you a lot since you don’t have to work overseas.

With these qualities in mind, is your lender a good one?

The life of an Overseas Filipino Worker is full of uncertainties. Despite the existing contract, there is a possibility that it won’t be renewed or your contract will be cut short due to unforeseen circumstances. In case this happens, how prepared are you and your family?

The good news is preparation could help you a lot to help you get back up on your feet in case the unimaginable happened. It may be difficult at first, but here’s what you can do:

1) Set up an emergency fund. 

Being financially prepared is a must, especially with your line of work. One of the things you can do to help you prepare financially is to set up an emergency fund for the family.

From the name itself, an emergency fund is something you can use during unforeseen circumstances. It could be sudden death, illness, and in this case, loss of employment. This fund can help you cover basic expenses such as utilities and food. Ideally, your emergency fund should help you last at least three to six months until you are able to find a new job.

You can read this post to know more about emergency fund with tips on how to set it up.

2) Always have a plan. 

Surely, you can’t work overseas for the rest of your life. You still want to get old in the Philippines and having a plan can help you with that.

What does this mean?

Think about the future. Think about the things you can do once your contract expires. It can be opening a sari-sari store, your own tricycle business or driving your own taxi. Consider buying a small property or a condominium unit and have it leased. The bottom line is have a Plan B and start working on it while your contract is still in force.

3) Invest early. 

Having a savings account is a good start in establishing your financial stability. Still, don’t limit yourself with your savings account.

While you still can, explore other investment opportunities such as mutual fund, UITF, or stocks. These investment options yield higher return than savings account, thereby giving you sufficient buffer in case your contract was not renewed.

Check this post to know more about your investment options.

4) Look for other income opportunities. 

So you were sent home because your destination country is going through political crisis. Even if the government gave financial aid, the amount will not be enough to help you last a month. What should you do next? ‘

Don’t be afraid to look for other opportunities. You can always apply again, but it will take months before your deployment. Or you can look for other jobs in the meantime to help you get by. The salary may not be as big as what you are earning abroad, but it will be enough to sustain your family’s needs while waiting for another opportunity.

5) Train your family early on. 

Admit it. Most of your salary is dedicated for your family. Aside from the monthly remittance, you have to fill up a balikbayan box with your family’s bilin. 

Cut the habit and train your family to live a simple life. Do not give in to their demands all the time just to appease them. Keep in mind that your life as an OFW is not forever. You will never know what will happen in the future. You don’t want your kids to get used to a lavish lifestyle, do you?

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.

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!

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.

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.

“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.