pagibig loan (government loan) vs bank loan

@oyenkai (4398)
Philippines
April 22, 2009 12:26am CST
I'm thinking of buying real estate for an investment since I think that starting my own small business is close to impossible given my schedule and my current income. I would of course apply for a loan, which is better pagibig loan (government loan) or bank loan? Do you have any experience on this?
1 person likes this
6 responses
@chiyosan (30206)
• Philippines
23 Apr 09
if you are married, in order for you to be able to have a bigger loan amount is to combine it with your husband, both yours and his contributions will give you just the right amount of loan you need for the property you are interested in. i guess you just need to compare the rates more, but of course it is a given that banks have higher interest rates
1 person likes this
@aseretdd (13736)
• Philippines
22 Apr 09
I think it is wiser to use you pag ibig loan rather than borrowing from a bank... since the interest is lower and there is no need for a lot of requirements... aside for that... no need for collateral... but the down side is that you can only borrow base on your contribution... so that can be quite low compared to what you can borrow from a bank...
• Philippines
22 Apr 09
In terms of interest rates, a Pagibig loan would be a better choice because they charge lower interest rates compared to banks. A Pagibig loan of up to 400,000 will bear interest of 6% per annum. The highest interest they will charge is 10.5% for loans over 750,000 to 2 million. Bank loans charge interest starting at 9.75% which is fixed for 1 year and can go as high as 11.5% for a fixing period of 16-25 years. There is also a yearly repricing after the fixing period. You may check out Pagibig fund's website and bank websites to be able to better compare.
@jlamela (4909)
• Philippines
22 Apr 09
Well not my own experience but my mother experience. Bank loan is always bad especially if you are struggling financially. In the bank loan you have only 1 year to pay your loan and usually with a very high interest and if you cannot pay even one month, it will generate another interest until you will be buried with debt. Pag-ibig is always great because as a member we have so many benefits. If you have to avail a salary loan from them, you will earn a dividend which will be added to your savings, plus the interest is not really big compared to bank loans. You will not be forced to pay every now and then and if you will resigned from your job and couldn't be paid anymore, your unpaid dues will be deducted from your savings.
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• Philippines
16 Apr 11
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@rsa101 (15483)
• Quezon City, Philippines
22 Apr 09
The thing about Pag-ibig Loans is that the interest they give is very minimal comapred to that of the bank. But, they do give out small loans only. It will also depend on what kind of house are you willing to buy. If you try the ones sold here in Manila you would probably issued a small amount of loan and you have to pay for the rest of the amount. For Bank loans they may require a stricter procedure and a little higher interest payments but they can give you loans much bigger than Pag-Ibig Loans which will still be subject to your income capacity.