Where to Apply for a Housing Loan

For most people working as an employee, it’s hard to save for the construction or purchase of your dream house. Maybe it will take several years before you can have enough money to build the house you want.

Basically, there are various ways in which how you can finance the construction of your house. One common way of getting funds is by applying a housing loan. A loan is a borrowed money from lenders like rich relatives, bank, financial institutions or government agencies.

Where to apply for a Housing Loan?

As I mentioned earlier, if you don’t have enough money for buying or construction of your own house you may apply a housing loan to have enough funds. Some of the typical place where you can get a loan are:

1. Rich relatives

For me, this is the best loan you can get particularly if there’s no interest on the principal amount. Maybe you can borrow money from your wealthy parents or siblings. However, there are also disadvantages if you pursue this one. You may carry out this kind of loan provided you are determined to pay regularly and punctually.

With this kind of loan, the application process is normally easy and fast unlike in the bank or other financial institutions. Moreover, you are not required to prepare any documents for the application.

2. Pag-IBIG

Pag-IBIG is the Philippine agency that provides housing loans for its members. Currently, Pag-IBIG has the lowest interest rate of all the financial institution in the Philippines providing housing loans. However, before you can apply a loan, you must be a member first with a total contribution of 36 months. If you are starting as new member and you want to apply for a housing loan, you can pay the remaining months to complete the 36-month rule.

Some of the disadvantages of this type of loan application is the slow processing and numerous documents you need to submit for the approval of your loan. Just a reminder: be patient and resourceful when you apply a housing loan at Pag-IBIG.

The interest rate of Pag-ibig for housing loan ranges from 8-12 % per annum. The application period could take maximum of more than one year but somehow it is a rare case.

3. Bank

It is better to apply for a housing loan to the bank where your savings account is located. More or less, you know the people working there or maybe they already know you which can be a good side when applying a loan.

However, it is also advisable to research the lowest interest rate among the banks which you can apply. I believe it is the most important thing you should consider when applying a housing loan, the interest rate. Second, would be the duration and ease of application process.

Different banks have various ways and systems on handling loan applications. Most of them are very strict in approving a loan, just be ready to furnish all required documents . Banks are normally faster to process and approve housing loan applications than Pag-IBIG.

How about you? Do you have other information about where to apply for a housing loan? Or do you have any experience to share when applying a loan from the lenders I mentioned above?

Final Word

In my own opinion, it is better to have your own house than to rent especially if you have the resources and capacity to buy or build a new one. If you don’t have sufficient funds at the moment, you can apply to various lenders such as your rich relatives, Pag-IBIG or banks offering housing loan. Each has its own advantages and disadvantages, just choose what you think is the most practical and lowest interest rate you can get.