What Is An OFW Loan And Which Are The Best To Apply For

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Is it worth it to take one?

Filipinos often move abroad for better career opportunities. A new culture and environment can do wonders! But when you’re in need of money, it can be hard securing quick cash on short notice. That’s why an Overseas Foreign Worker or OFW loan in Philippines is so valuable in today’s day and age!

What is an OFW loan?

Basically, these are loans that are specifically available to Filipinos who work outside of their native country. There are different types that an OFW can take depending on their employment situation. A Pinoy Abroad OFW Loan can help both land-based and sea-based Filipino citizens working overseas and can be done remotely. There are also specific loans for OFWs working in land-based or sea-based sites. For the situation-specific loans, you’ll need to be in the Philippines to apply.

4 reasons why an OFW loan in Philippines might help

ofw loan in philippines

Source: Shutterstock

People are often unsure whether they should take out a loan to help pay off debt. But there are many ways an OFW loan can help, not just with debt. It can further your career, help with emergency family funds or be the ticket for an affordable and well-deserved holiday.

1. Debt consolidation

Living overseas can easily catch a lot of Filipinos out since they’re not used to the standard of living. And this can result in maxed credit cards or overdue bills. An OFW loan in Philippines is a great way to lump all existing debts together into one pool that will make it easier to pay off in single monthly payments. For more on debt consolidation, see our guide here.

2. Emergency fund

Many take jobs abroad to provide more for their families at home. However, when there are emergencies it can be hard to raise money quickly when you need it urgently. An OFW loan can be a convenient backup if you need to send money back home.

3. Education

Education can be the foundation for your children’s success. And an OFW loan can go a long way towards making sure your child gets the best opportunities possible.

4. Business opportunity

Maybe that entrepreneurial spirit won’t rest and you’ve seen something that caught your eye. An OFW loan in Philippines can be the boost your need to get your business started.


How do I apply for an OFW loan in Philippines?

The requirements are quite straightforward to prove you are eligible to apply. You’ll need to provide proof of your status as an OFW.

  • A Filipino Overseas Workers valid contract
  • Must be at least 21 years old, but cannot be older than 65 years old upon loan maturity
  • Minimum salary of Php20,000
  • Must have a co-borrower (normally an immediate relative with regular income source)

The documents you need when applying are as follows:

  • 2 photocopies of valid government-issued IDs
  • Latest Contract of Deployment or Working Visa
  • Photocopy of OEC (POEA Overseas Employment Certificate)
  • Valid plane ticket
  • Proof of residency under the name of the borrower (a utility bill can work here)

The co-borrower needs to be at least 21 and no older than 59 upon loan maturity. They should be immediate family (parents, spouse, siblings) and have a source of income.


Top OFW loan in Philippines

With this said, there are many OFWs in the market to help Filipinos making a living abroad. We’ve got the top 5 OFW loans in Philippines to help you out in a tight spot.

1. Home Development Mutual Fund (Pag-IBIG) and Social Security System (SSS) OFW Loan

ofw loan in philippines

Source: Wikimedia Commons

As long as members have been contributing to their SSS for 24 months, OFWs can a housing loan with some of the lowest interest rates amongst its competitors. The maximum annual interest rate is capped at 10% for a 30-year loan period. 

In 2018, the Pag-IBIG Fund even lowered its housing loan rates to 5.375% and 6.375%, for the one-year and three-year loans. You can apply for the housing loan here.

Documents OFWs need to bring when applying include the above, with an additional few statements.

  • Proof of income from any of the following:
    • Original employer’s certificate of income
    • Other proofs of income
    • Employment contract
  • Health Statement form (if over 60 years old)
  • Special Power of Attorney notarized before departure date or authenticated by the Philippine Embassy or Consulate in the country of employment


2. Overseas Workers Welfare Administration’s (OWWA) Loan

ofw loan in philippines

Source: Overseas Workers Welfare Administration

Perfect for opening a business. OFWs can borrow from Php100,000 to Php2 million as a single proprietor, or Php5 million if you’re a representative of a partnership or corporation.

The annual interest rate is low at 7.5%. And OFW-turned -entrepreneurs receive guidance through mandatory training on starting up and maintaining a business.


3. SSS Salary Loan

ofw loan in philippines

Source: Social Security System Philippines

This is the most versatile loan for Filipinos working abroad. Despite earning higher wages in their new job, emergencies can still crop up at unexpected times which needs more money than you’ve initially saved. It might be hospital fees, or paying for the costs of applying for a job on international grounds. That’s why a low-interest personal loan can be just the thing you need.

At a 10% annual interest rate, you can borrow a money that’s the amount of the average monthly salary and pay it over 24 months. You just need to have contributed to your SSS fund for a minimum of 36 months.


If you’re considering working abroad, don’t miss out on applying for the best OFW loan in Philippines! Share with any friends who you think might benefit from these loans!

Read more articles below:

How To Apply For A New Passport In The Phillipines According To DFA Passport Requirements

How To Check Your SSS Contribution Account Online: A Step-By-Step Guide

The Only Guide You’ll Need For All Mandatory Employee Benefits In The Philippines

Written by

Vinnie Wong