OFWs demanding more auto loans

The overseas Filipino workers’ (OFWs) demand for auto loans is growing at an unprecedented rate. This in turn is grabbing the eyeballs of the banks which are keen on cashing in on this trend. Banks have seen a rise in demand for vans, Asian utility vehicles and sports utility vehicles. This is clearly evident in the statistics which show that about 22-23 per cent of new auto loans are being released by the Philippine National Bank.

 

Today the OFWs are no longer themselves to buying houses and housing appliances but also vehicles which are as good as any other asset. This is accounted to the fact that more OFWs are employed as highly skilled professionals in the developed countries which gives them the financial power to purchase more. Most of these OFWs take up an average loan of about P700,000 with a tenor of three years. These clients usually pay 20 per cent in upfront equity and amortise the rest.

 

It would not be easy to say whether this trend of buying cars and other vehicles is a good idea or not simply because it depends on a number of things like, the capacity to pay, benefits of getting a vehicle, costs of getting a car and other associated risks. In a nutshell, the OFWs should take into account all the features of risks involved before thinking of making an investment like this.

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