ofw loanOFW loan in the Philippines has become a refuge for many overseas Filipino workers to get cash loan and apply for credit to use so they have money to spend for processing and other needs before departure including family expenses while the OFW is still not receiving the first month’s salary working abroad. Now, to apply for this type of loan, workers must first learn why there have been drastic changes in the past years to the system of approval for your loan application. The top reasons or factors are listed below based on my personal knowhow and first hand information as a freelance loan consultant in the Philippines.

“(1) Grant a loan to an overseas Filipino worker with interest exceeding eight percent (8%) per annum, which will be used for payment of legal and allowable placement fees and make the migrant worker issue, either personally or through a guarantor or accommodation party, postdated checks in relation to the said loan;

“(2) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is required to avail of a loan only from specifically designated institutions, entities or persons;

“(3) Refuse to condone or renegotiate a loan incurred by an overseas Filipino worker after the latter’s employment contract has been prematurely terminated through no fault of his or her own;

“(4) Impose a compulsory and exclusive arrangement whereby an overseas Filipino worker is required to undergo health examinations only from specifically designated medical clinics, institutions, entities or persons, except in the case of a seafarer whose medical examination cost is shouldered by the principal/shipowner

  • Failure to produce a nearest relative co-borrower / co-maker with stable and regular source of income
  • Failure to produce visa and plane ticket due to lacking in placement fee payments which is in relation to the #1 reason why OFW get declined of a loan application.
  • Very low basic salary stated in contract. Most lending companies in the Philippines today would allow at least a basic salary of Php 25,000 pesos stated in the OFW contract and in black and white paper.
  • Domestic helper overseas workers are currently only allowed to apply if the country of destination is in European countries. We all know that many of the DH workers are currently being deployed to Middle East countries.
  • Failure to pass the C.I. or credit investigation and B.I. or background investigation. Since many lending companies have lost expected revenues and experienced a very high delinquency rate due to borrowers who were not able to pay for the loan proceeds, the system has mostly been devised to offer the loan from 1 day release to 3-10 days processing, making it hard for many OFWs to qualify because most of them would have flight schedule and complete requirements only in the last 1 week of the processing of work overseas.
  • Disclosure of any relative or close family ties with military, media personnel, lawyer and such.
  • Submission of fake or tampered documents in any form.
  • Use of harsh words during application process for some reason (usually due to impatience with the processing time).

So far, the factors stated above are the major reasons why an OFW loan applicant gets denied. I hope to have helped some of you out there who are looking for information to have you apply and get approved and know your chances of approval prior to application to avoid loss of time, effort and money in the process.