Pag-IBIG extends cash loan payment terms to 3 years
MANILA, Philippines — The state-owned Home Development Mutual Fund or Pag-IBIG has made its cash loans more flexible by extending its payment term to three years, its top officials announced last week.
In a statement Thursday, Pag-IBIG said it continues to improve its programs to respond to the needs of its members.
“This year, we are lengthening the term of our cash loans from two years to three years to give borrowers more time to pay off their loans, and more importantly, to make its monthly payments lower,” said Secretary Eduardo del Rosario, Chairman of the Department of Human Settlements and Urban Development (DHSUD) and the 11-member Pag-IBIG Fund Board of Trustees.
Pag-IBIG Fund’s cash loans come in the form of a Multi-Purpose Loan (MPL), and a Calamity Loan (CL) for areas under a state of calamity. Also known as Short-Term Loans (STL), the MPL and CL serve as affordable and readily accessible sources of funds for its members.
According to the agency, qualified members can borrow up to 80 percent of their total Pag-IBIG Regular Savings, which consists of their monthly savings, their employer’s counterpart contributions, and dividends earned annually.
The proceeds can then be used to pay for tuition fees, medical expenses, minor home improvements, as capital for small businesses, or as emergency fund during calamities.
“Pag-IBIG cash loans are paid over the course of 24 months. And now, our members have the option to extend the term to 36 months. By choosing the longer payment period, members can enjoy significantly lower monthly payments,” Pag-IBIG Fund Chief Executive Officer Acmad Rizaldy Moti said.
He noted that they have reduced monthly payments by almost a third with the extension of the payment period. With the average cash loan amounting to P20,000, members pay P1,016.52 per month for a Multi-Purpose Loan and P897.23 per month for a calamity loan under a two-year payment term.
However, with the new three-year payment term option, the amount of each monthly payment will be reduced to only P734.57 a month for a Multi-Purpose Loan, and P615.72 monthly for a calamity loan.
Pag-IBIG said that with payments spread out over a longer period, monthly payments were brought down by 28 percent for a Multi-Purpose Loan and 31 percent for a calamity loan.
“We recognize that these are challenging times, and we are doing all we can to help our members as the health emergency continues. From January to July alone, we have released P25.42 billion in cash loans to aid more than 1.1 million members,” said Moti.
“We are poised to help more members in the coming months, now that the extended payment term has made our cash loans even more affordable. We also made the process of applying for loans safer and more convenient by accepting loan applications online via the Virtual Pag-IBIG,” he added.
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