Pag-IBIG Loans Guide in the Philippines
People have different notions about a house, yet everyone dreams about owning a home. All over the world, purchasing a house is on everyone’s bucket list and is considered a financial milestone.For many, a house is the most lovely location where they built their family and enriched their souls with the vivid memories of their children’s growth. For others, it could be a safe, secure, and comfortable habitat for their parents, who sacrificed heavily for the betterment of their children. A newlywed couple would consider owning a house as a declaration of their independence and a statement of their financial stability.
Whatever be the reasons, having an independent shelter is a desired financial milestone for all. Sadly, only very few super-rich alone can make it without financial support from banking institutions. The continuously increasing prices for residential buildings make owning a house unachievable for most Filipinos. Regular spending on rent drains their financial stability and has a damaging influence on their emotional well-being. Realizing the precarious situation, the Government has constituted the Pag-IBIG fund with a vision “For every Filipino worker to save with Pag-IBIG fund and to have a decent shelter.”
What Is Pag IBIG Fund?
The Home Development Mutual Fund (HDMF), popularly known as Pag-IBIG, is a consolidated fund to make affordable housing accessible to all.
The Philippines’ Government owns and controls the fund and works under the Department of Human Settlements and Urban Development. The working of the Pag-IBIG fund is as follows. Members provide monthly contributions, and it constitutes the fund. When a member needs money to buy a house, he can get up to PHP 6 Million as a Pag IBIG loan.
The loan duration can be up to 30 years, and the interest rate can be as low as 4.5%, based on your eligibility. Apart from buying a house, one can use these loans for house renovation activities or mortgage refinance. A member can utilize his Pag-IBIG fund contributions as savings as well. When a financial emergency strikes, he can withdraw a portion of his contributions as a loan with minimal formalities and inconveniences. The return from your Pag-IBIG contribution is much better than conventional bank deposits, and the dividends are tax-exempt. There are no account maintenance charges either.
These features make Pag-IBIG membership an essential and rewarding entitlement for a Filipino living in a growth-hungry economy like the Philippines.
How to Become a Pag-IBIG Member?
Pag-IBIG offers two categories of memberships, such as Mandatory membership and Voluntary membership.
A. Mandatory Membership
The law insists on mandatory membership of Pag-IBIG for some categories of employment. For such employees, the employer has a statutory obligation of Pag-IBIG contribution towards the employee account.
Below are the people who become the Pag-IBIG members by virtue of their employment:
Private Employee: All private sector employees below 60 years of age with active Social Security System (SSS) coverage.
Household Helper: If you earn at least PHP 1,000 per month by doing household jobs such as driver, gardener, clock, governess, or any other domestic services, you become a Pag-IBIG member.
Filipino Seafarer: The foreign ship owner and the manning agency becomes the employer of a seafarer upon signing the standard contract of employment and makes him a member of Pag-IBIG.
Self-employed: A self-employed person who earns at least PHP 1,000 per month and is not above 60 years of age is a mandatory Pag-IBIG member, irrespective of his business, trade, or occupation.
Expatriate: Any foreign citizen who lives and works in the Philippines is mandated to be a member of Pag-IBIG, provided he is not more than 60 years of age.
Public Sector Employees: All public sector employees with the mandatory Government Service Insurance System (GSIS) coverage, including members of the judiciary and constitutional commissions, automatically become Pag-IBIG members.
Uniformed Members: Members of the Armed Forces of the Philippines, the Philippine National Police, the Bureau of Fire Protection, and the Bureau of Jail Management and Penology are mandatory members of Pag-IBIG.
Filipinos employed by foreign-based companies, irrespective of their employment locations, are also members of Pag-IBIG.
B. Voluntary Membership
The primary purpose of Pag-IBIG is to make housing affordable to all, especially for the people of low economic background. A significant number of Filipinos live outside the ambit of the formal economy. Voluntary membership to the Pag-IBIG fund is an attempt to reduce this gap.
Any Filippino within the age group of 18 years to 65 years can be a Pag-IBIG member through voluntary contributions. Below are the prerequisites for anyone to be a voluntary member:
• Non-working spouses of a Pag-IBIG member without any vocation or employment offering mandatory coverage.
• Filipino employees of foreign governments or international organizations that do not have any administrative agreement with the fund.
• You can be a voluntary member if you cease to work or are unemployed and wish to retain the membership through regular contributions.
• Leaders and members of religious groups.
• Public officials or government employees who are not covered by the GSIS.
• Any earning individuals or groups determined by the Board of Directors.
How to Become a Member?
Filipinos with formal employment don’t need to make separate requests for Pag-IBIG membership. Your employer will perform the necessary paperwork for your enrollment. You may only need to submit some documents such as ID cards for verification. As there are different types of voluntary memberships, the documents and process vary. The applicant can submit his membership application by visiting the Pag-IBIG branch or using the online facility.
There is no processing fee for membership registration, and the steps are as follows:
1. Submit 2 copies of duly filled Pag-IBIG Member’s data form (MDF) and other supportive documents to the Marketing and Enforcement Division of the Pag-IBIG branch;
2. Procure the Payment Order Form (POF) from the office and make the contribution payment at the Cash Division;
3. After payment, present originals of supportive documents to the Marketing and Enforcement Division for verification.
For online registration, the applicant has to fill the online registration form and create an online account in the Pag-IBIG system. After submission, the applicant will receive a Registration Tracking Number. Once the registration is successful, the system will notify you about the availability of their PAG-IBIG Membership ID and the following steps to collect it either via SMS or through the Pag-IBIG hotline.
Pag-IBIG Fund Programs and Benefits
The major Pag-IBIG programs are:
1. Pag-IBIG Housing loans;
2. Pag-IBIG Multi-Purpose loans;
3. Pag-IBIG Calamity Loan Program.
Apart from loans, HDMF provides different insurance protection for its members as well.
In the unfortunate event of death or permanent disability of the borrower, the Mortgage Redemption Insurance program offers a loan waiver of up to PHP 500,000 or a 20% refund. All properties secured using the PAG-IBIG loan get automatic insurance coverage for any damages arising from fire, earthquake, flooding, and other natural disasters and accidents through the Fire and Allied Perils Insurance Program.
The mandatory requirement for any category of Pag-IBIG loan is that the member should have a paid-up contribution of 24 months. There can be additional eligibility requirements for each type of loan as well.
Pag-IBIG Calamity Loan
An unforeseen calamity like flood, cyclones, fire, or volcanic eruptions can happen at any time. Such an unexpected catastrophic event can push your life and business out of track.
Immediate financial assistance in the Pag-IBIG calamity loan form is available for Pag-IBIG members. One can draw up to 80% of his total accumulated fund value for an interest rate of 5.95% per annum. Usually, the loan duration is for 24 months. There is a grace period of 3 months, which means you only need to repay the loan from the 4th month after the loan approval.
One can submit the Pag IBIG Calamity Loan online application 2020 within 90 days from the state of calamity declaration through the designated Pag-IBIG Calamity Loan form 2020. Learn more about how to apply Pag Ibig calamity loan online at the official Pag Ibig website
Pag IBIG Salary Loan
A member can draw some money from the accumulated fund for his financial emergencies of any type such as educational expenses, home repair, vacation, or hospital bills. At least one-month contribution within the last 6 months before the loan application and income proof are essential for this loan. If you have any other loans with payment default history, it can create hurdles for loan approval. You can get a Multi-purpose Salary Loan online of up to 80% of your savings for a loan period of 24 months at an annual interest of 10.5%.Apply now
Pag-IBIG Housing Loan
Pag-IBIG offers 2 categories of housing loans:
1. End-user financing program – The regular housing loan program that offers up to PHP 6 Million as a housing loan;
2. Affordable Housing Program – targets the low and minimum wage earners and offers PHP 750,000 with a repayment window of up to 30 years.
The eligibility condition for these loans are as follows:
1. An applicant should be an active member with a minimum contribution of 24 months;
2. The applicant’s age shouldn’t exceed 65 years at the time of application and 70 years upon maturity.
3. The applicant should not have any outstanding Pag-IBIG loans either as a primary borrower or co-borrower. 3. There should not be any previous history of loan default, preclosure, or cancellation of loans.
4. The available loan amount and loan conditions vary with each applicant based on their repayment capabilities. One can quickly check his repayment capability by using the Pag- IBIG Loan Calculator tool.
The Alternative for Pag-IBIG Loans
Pag-IBIG is the best option for a housing loan due to its long tenure and affordable interest rates. But depending on the fund for all your financial needs is not a good idea.
When you compare the cost-effectiveness of their loans with that of well-established lenders such as Robocash, the advantages are meager. The loan approval process for Pag-IBIG is hectic and time-consuming compared to a fully automated lender like Robocash. The strict eligibility requirement and the need for a good credit score can make many Filipino’s ineligible for Pag-IBIG loans. But the eligibility criteria for Robocash loans are straightforward.
You only need to be a Filipino citizen within 21-70 years of age, with a regular income and working mobile connection. As a legit and state licensed lender, Robocash ensures you the most transparent and ethical behavior without resorting to any predatory practices.
The fully automated system of Robocash enables you to apply and secure a loan of up to PHP 25,000, even at midnight or while traveling. Robocash has a loan approval rate of 95%, and the disbursement happens within a few hours.
Defaulting of a Pag-IBIG contribution does not invite any penalties, but not the loans. If you have any loans with a default history, it can affect your chances of getting a major loan, such as a house loan. So it’s always better to use other alternatives such as Robocash for your immediate financial emergencies to avoid the possibilities of denial of loans for greater purposes.Apply now
RyanRobocash is one of a kind. They are true to their commitment that once u pass d review they will credit the loaned amount right away! In less than 5 mins we got the money transfered to my gf bank account. Amazing! Two thumbs up ROBOCASH!!!
EricaI tried Robocash out of curiosity. To cut to the chase, Robocash is ideal for "petsa de peligro" days where it's almost payday but also your bills is on due date because they have short payment terms (I was given 7 days term for my first loan). You can get approved as fast as 30mins and the loan will reflect immediately.
SamI loved RoboCash not just the app but for the whole experienced that I had in applying for a loan. Hassle free and loan disbursement is as quick counting 1-2-3.