Let’s face it: not everybody can be ready for the rainy days or financially blue days and have a savings account with heaps of balance and that will come in useful when catastrophes such as floods, hurricanes, and earthquake strike their deadly blow. Every year we hear of natural calamities wreaking havoc in different parts of the country, which leaves other Filipinos whirling in nose-deep floodwater. In case you are required to apply for a loan for home renovations, repairs and other refurbishment purposes due to such events, you now have a calamity loan to turn to.
What is calamity loan?
A calamity loan is a kind of loan tailor made for the purpose of restoration and recuperation if an individual sustains a heavy loss or damage to his/ her property due to natural adversities. In the Philippines, government workers and private-sector workforces can avail calamity loan from the Government Service Insurance System (GSIS) or from the Social Security System (SSS) in that order. You can also turn to the Home Development Mutual Fund (Pag-IBIG Fund) for both the parties.
Calamities do not come with a warning, most of the times. One such incident is enough to wash away your life’s savings. The impact it leaves on your body and psyche cannot be measured. And who could you turn to help when others are just as affected as you. Calamity loan is indeed a saviour in need.
Eligibility Criteria for Calamity Loans:
For all the three aforementioned government agencies, the person who applies for the calamity loan must reside in a region listed under a state of calamity by the local government or the National Disaster Risk Reduction and Management Council (NDRRMC). But there are some big variances when it comes to the particulars of being eligible for the loan as given below.
For SSS members:
Registered members of Social Security System can apply for calamity loans without any hassle. They are endowed with flexible payment tenures and reduced interest rates to prospective debtors who were distraught by the misfortune. However, please bear in mind that SSS only gives out calamity loans once the mishap has taken place.
Given below are the requisites for SSS calamity loan schemes:
- The applicant must not be more than 60 years of age.
- He/ she should have contributed to the system at least for 24 months.
- He/ she must have made at least three months’ worth of contribution instantly before applying for the loan.
Checkout more details on SSS Housing Loan Scheme.
For GSIS staffs:
Filipino Government employees can avail financial support from the Government Service Insurance System in the event of any natural catastrophe without any hassle. While members can stipulate the sum they can avail as per their contributions, GSIS only provides fixed interest rate at six percent and payment tenure of up to three years maximum.
Please find the list of documents required for calamity loan application given below:
- Papers to prove of your authentic resident status or employment status in any government office within the confirmed calamity zone. To prove the residence of an individual within the disaster region, one should get the relevant documents from either the local government unit or the NDRRMC.
- The applicant should be in active service of the government and should not be on leave of absence without pay owing to suspensions or other admonishments due to pending criminal or managerial charges at the time.
- The applicant should have no backlog in payment of compulsory social insurance contributions.
- You also shouldn’t have any loan that has been stated in default.
For Pag-IBIG members:
For both government and private sector workers, the Home Development Mutual Funds (more commonly called as Pag-IBIG Fund) can apply for calamity loan from the agency in case of emergency situations. With Pag-IBIG Fund, staffs can avail up to 80 percent of their Total Accumulated Value (TAV) at 5.95 percent per year.
Given below are some of the important requisites for Pag-IBIG Fund members:
- You should have made a minimum of 24 monthly contributions (at least for 2 years).
- You should have served as an active member with at least 5 months’ worth of contribution before applying for this loan.
Read more on Pag IBIG Funding.
Frequently Asked Questions (FAQs):
- What are the advantages of availing a calamity loan?
Usually, the key purpose of calamity loan is to offer financial aid to people emaciated by natural disasters. While the loaned sum is the chief aim of calamity loans, there are many other benefits of getting one such as:
- Your contributions made for the last three months will be waived off. When one member applies for a calamity loan, his/ her contributions to the government agency where they mortgaged funds will waive off his payments for at least 3 months for the time being, based on the severity of the damage sustained by you. This can definitely offer a temporary financial respite to catastrophe-struck members at least for some time.
- Reduced interest rate at up to 6 percent per year is another attractive feature. Unlike most lenders that levy higher interest rates, government agencies can only enforce low interest rates to calamity loans. Apart than these establishments being non-profit, low interests also offer members the chance to settle their debts in the shortest time period possible.
- You can take up to three years to pay off the loan completely as EMIs. To make such payment loans much simpler, these groups give you payment tenures for up to 36 months. From their viewpoint, three years is more than enough for an individual to recuperate financially after the calamity and pay the dues.
To apply for calamity loan, the most common requisites are the documents given below:
- A duly completed calamity loan application form that can be easily procured from their satellite offices or corresponding official websites.
- Duplicate copy of at least two government-issued ID proofs.
- Income proof such as most recent monthly pay slips, BIR form 2316, and other documents that will prove your monthly earning and employment.
- Proof of damage caused by the calamity such as newspaper reports, photographs etc.
- For Pag-IBIG members, you may download the Declaration of Being Affected by Calamity form from their official website.
- For other agencies, you shall get the relevant papers from the local government or the NDRRMC.
Regrettably, there might be occasions that your calamity loan application will be rejected due to a number of reasons such as neglected outlays or prevailing loans. While this could completely pan your prospect of availing the loan from the government, there are plenty of other loan choices you can get to lift yourself financially in bad times.
Personal loan, which is given by most lenders, is your next ideal option as it does not need collateral/ security and has a simple procedure compared to other loans. In the meantime, those who already own a house can also apply for a house loan to restore their houses. However, banks require a form of collateral for home loans, meaning that you have to use your home to indemnify settling of debt from financial institutions.
With storms, inundations and flood becoming a normal happening in the country, the perfect defense you can adopt is saving for ‘rainy’ days, literally and figuratively. While calamity loans from various institutions are already covered, being upbeat in getting ready for the worst is still the best thing you can do to safeguard yourselves from monetary loss and property damage owing to natural disasters.