How to Apply for Pag-IBIG Multi-purpose Loan

If you’re a Pag-IBIG member, it is important that you know the benefits you can avail from being their member. The Home Development Mutual Fund is not only providing housing loans to its eligible members, but also provides other financial assistance to eligible members, such as the Pag-IBIG Multi-purpose loan (MPL). For small business owners and entrepreneurs, who need additional money to finance their small businesses, short-term MPL can already be a good source. Besides, this program offers a lower interest loan compare with other financing and lending institution in the market. The following are steps, requirements and guidelines on how to apply for a Pag-IBIG Multi-purpose loan in the Philippines.

 

What is a Pag-IBIG multi-purpose loan?

Under HDMF Circular No. 56-H, Pag-IBIG multi-purpose loan (MPL) is a program that provides short-term financial assistance to eligible Pag-IBIG members for the following purposes:

a. Minor home improvement
b. Livelihood / small business financing
c. Medical assistance
d. Education
e. Purchase of appliance and furniture
f. Other needs
Loan features

The following are the features of MPL loan:

1. Loan amount

An eligible borrower’s loan entitlement shall depend on the number of contributions made, based on the following schedule:

No. of Contributions / Loan Amount

24-59 months: Up to 60% of TAV
60-119 months: Up to 70% of TAV
At Least 120 months: Up to 80% of TAV

TAV means the total accumulated value from the member’s personal contributions, the corresponding contributions of his employer and the total dividend earnings.

2. Interest

The loan shall bear an interest rate of 10.75% p. a. for the duration of the loan.

3. Loan release

The loan proceeds shall be released through a check payable to the borrower or shall be credited to the borrower’s bank account through the LANDBANK’s Payroll Credit Systems Validation (PACSVAL) and Philippine Domestic Dollar Transfer System (PDDTS) facilities, and other similar modes of payment.

However, for MPL used as payment of housing loan arrearages, the check shall be made payable to Pag-IBIG Fund for the account of the member-borrower.

Unclaimed checks shall be mailed to the member-borrower after 3 days from the DV/check date

4. Loan term

The loan shall be paid over a maximum period of 24 months, plus the applicable grace period of 2 months for local accounts and 5 months for centralized accounts. Centralized accounts shall refer to employers that prepare the payroll in advance, usually at the head/central office. All other accounts not falling under the category of centralized accounts shall be classified as local accounts.

5. Loan payments

The loan shall be paid in equal monthly amortizations in such amounts as may fully cover the loan obligation. For Employed Members, payments shall be made thru salary deduction. For Voluntary Members/Individual Payors, payments shall be made through any of the following modes: a. Over-the-counter; b. Auto-debit arrangement with banks; c. other mode of payment that Pag-IBIG Fund may adopt in the future.

6. Penalty rate

A penalty of 1/2% of any unpaid amount shall be charged to the borrower for every month of delay. However, for borrowers paying their loans through automatic salary deduction, penalties shall be cancelled/reversed only upon presentation of proof that non-payment was due to the fault of the employer. The said penalties shall then be charged against the employer.

7. Loan Renewal

A borrower may renew his MPL upon payment of at least 6 amortizations. The outstanding balance together with any accumulated interests, penalties and charges shall be deducted from the proceeds of the new loan. In case of full payment prior to loan maturity, a borrower shall be allowed to apply for a new loan any time.

 

Who are eligible to file?

Any Pag-IBIG member who satisfies the following requirements may apply or file for a multipurpose loan (MPL):

1. The member has made at least 24 monthly contributions.

2. The monthly net take home pay requirement of government employees shall be subject to the rules and regulations as provided for in the General Appropriations Act (GAA). On the other hand, the monthly net take home pay of employees working with the private sector shall be based on their respective company policies, if any.

3. Members with active Fund membership at the time of application with commitment from both the employee and employer to continuously remit contributions at least for the term of the loan.

4. For members who have withdrawn their membership contributions due to membership maturity, the reckoning date of the updated 24 monthly contributions shall be the first monthly contribution following the month the member qualified to withdraw his Pag-IBIG contributions.

5. For members who have active contributions under both the Pag-IBIG I and Pag-IBIG II, the membership contributions under Pag-IBIG II shall be considered to meet the required 24 monthly contributions.

6. A member with an outstanding Pag-IBIG housing loan that is not more than 9 months in arrears and is not yet cancelled or foreclosed.

7. A member with an outstanding Pag-IBIG housing loan that is more than 9 months in arrears but is not yet cancelled or foreclosed may be allowed to avail of an MPL, provided that the purpose of the MPL is to update his/her housing loan arrearages. The MPL proceeds to be applied to the housing loan arrearages shall be subject to the applicant’s loan entitlement.

 

How to file for HDMF MPL

The applicant member shall:

1. Secure the Pag-IBIG Multi-Purpose Loan Application Form (MPLAF) from any Pag-IBIG Fund NCR/Provincial branch. You may also download the form at the bottom of this article to have an idea of what to fill out and other information you need to know.

2. Accomplish 1 copy of the application form.

3. Under PACSVAL/PDDTS releasing, attach photocopy of passbook or Automated Teller Machine (ATM) card reflecting the account name and bank account number.

4. Submit complete application, together with the required documents to any Pag-IBIG Fund NCR/Provincial Branch. Processing of loans shall commence only upon submission of complete documents.

 

Tips in filing your MPL

In 2010, I have made my first application for the loan. As a self-employed member, I was required to attach my latest annual income tax return as a proof of my income. Barangay certificate is also a requirement as a clearance that you are in good standing in your barangay. The Landbank ATM card is an essential requirement during my application. It should be photocopied and filed together with your MPL application form. If you still don’t have a Landbank account, you can accomplish a Letter of Introduction from Pag-IBIG to open an ATM account as a Pag-IBIG member. Landbank required me an (a) initial deposit of P100.00 and a P50.00 ATM card fee, (b) 2 Valid ID’s, (c) 3 1×1 ID pictures (should have negative), and the (d) letter of Introduction from HDMF. After filing all the requirements with the Pag-IBIG, I got my loan proceeds credited in my LBP ATM account within a week.

Note: Please remember that HDMF regional offices may vary on the requirements they ask to their members. Therefore, it is always best to visit the nearest HDMF office in your area to ensure that you will completely comply all their requirements.

Reference:
HDMF Circular No. 56-H
HDMF Multi-Purpose Loan Application Form (MPLAF)
HDMF – Pag-IBIG Fund official website