The Philippine Veterans Affairs Office(PVAO) is a dedicated office to address the needs of war veterans and works under the aegis of Ministry of National Defense. To help veterans on pension with their credit needs, the PVAO loan is a loan offered to retired members of the military in the armed forces in Philippines.
Also known as Pension Loan, this product is offered by rural banks and smaller players in the banking segment to qualified veterans who have served the defense force. This loan is offered to pensioners in exchange for monthly pension claims. To be primarily eligible for the PVAO Loan, the pensioner has to pledge his passbook and be willing to offset future pension payments against the borrowed loan amount. This loan instrument can be compared to a Personal Loan in the commercial market and is mostly offered by Rural and Microfinance institutions.
Features & Benefits of PVAO Loan
Available to PVAO Pensioners
This humble loan instrument is a one of its kind lending product for veterans who are drawing pension provided by the PVAO. Also known as Pensioners Loan, it's an easy-to-borrow loan available exclusively to veterans to help them fulfill various financial needs after retirement from the military or other defense forces.
Pleasing Loan Quantum
Banks and financial institutions offer up to P50,000 to fulfill various needs of the veterans at low rate of interest. Though not high as a personal loan, the PVAO loan will be sufficient enough to take care of the immediate and emergency needs of pensioners.
Simple Loan Term
The borrower has the flexibility to choose a term of their choice for up to 12 months. Since this is a no frills loan, the satisfaction of having paid off the loan in a short term is immense with the PVAO Loan.
Equated Monthly Installment(EMI) Mode of Payment
This loan instrument ensures little payment hassles for the borrower since the pension receipts will automatically cover the loan repayment. The borrower does not have to worry about manually remitting the payment every month. Simply pledge a part of your monthly payment to the lender and the rest will be taken care of automatically.
Low Interest Rates/Minimal Fees & Charges
This loan comes at very affordable interest rates, keeping in view, the controlled income of the pensioners and their monthly budget. Most of the institutions that offer the PVAO loan charge no service/ processing fee, keeping the costs of loan extremely low. Most of the institutions that offer Pension loan for PVAO pensioners compute the interest on the basis of diminishing balance.
Option to Re Avail the Loan Amount
Some banks and institutions allow re-availment of the loan amount after payment of about half the loan amount in the existing contract. This benefit gives it a revolving credit option.
Leading Banks That Offer Loans for PVAO Pensioners in The Philippines
- Rural Bank of Rosario
- FICO Bank
- Rural Bank of Agoo
- Veterans Bank
- Golden Harvest Pensioners Loan
PVAO Pensioners Loan Interest Rates
As mentioned earlier, the rate of interest for loans offered for PVAO pensioners are quite low compared to other offerings of similar nature in the banking segment. Depending on the institution/bank offer, the Add On Rate for a loan term of 6 months starts as low as 6% and can go up to 7% as the term goes up. The EIR(Effective Interest Rate) works out to be around 10.22% for a 6-month loan on an annual basis.
It would be a wise decision to visit the nearest banking branch in your locality to make an inquiry about prevailing interest rates. Some of them may also offer details of the charges billed on their website.
Since this is a simple loan instrument, the requirements are quite simple and easy to fulfill. The following are the documents an aspirant is required to produce during the application process.
- ATM Card
- ID Pictures of both the primary borrower and co- borrower.
- Last 12 months Statement of Account(SOA).
- Valid ID or Residence Certificate(Current Year). Co-makers and Co-borrowers are also required to produce valid IDs as a part of the paperwork.
- Sketch of residence of borrower
- Any other documents based on the bank’s requirements.
Some of the institutions offering loan in this category may ask the applicant for furnishing a security. They may require a co-maker, preferably immediate relatives such as spouses or Pensioners receiving their monthly pension in the same bank. Spouse can be signed as co-borrower.