Domestic helper loans are facilities intended for people who perform domestic jobs involving household chores, caretaking, and other house-related services.
Domestic helpers are fundamental to families worldwide as they offer services that cannot be replaced, such as childcare and elder care, among other household chores. Despite being an invaluable asset to economic units, domestic helpers have to bear financial strains in case of emergencies or any sudden expenses. Fortunately, most financial institutions offer domestic helper loans designed to give them easy and fast access to cash.
However, getting such loans depends on some prerequisites, which differ from lender to lender and country to country. In this post, we look at the basic requirements for domestic helper loans and ways to increase your chances of getting approved.
Eligibility Requirements for Domestic Helper Loans
Some loan facilities can cover medical treatment, family emergencies, traveling to their home country, and education fees. However, acquiring these loans becomes quite complex due to the unique conditions of employment applied to domestic helpers. Here are some critical requirements considered by the lenders:
Verifiable Employment Contract
The eligibility criteria for a domestic helper loan require proof of a valid employment contract. Notably, some lenders require the remaining time of the contract to be at least six months so that the borrower has a dependable source of income throughout the loan period.
Generally, the lender requires a copy of the contract specifying terms of employment, salary paid, duration, and any other necessary information. This serves as some form of employment proof and assures the lender regarding job security; therefore, the risk of default is lower.
Significantly, this impacts the amount to be lent or the duration of the repayments, for instance, if the remaining time of the job contract is very short.
Minimum Monthly Income Requirement
The other essential requirement domestic helpers must meet to qualify for a loan is income verification. Meeting the minimum income limit will increase the chances of successful loan approval and allow the borrower to ensure his financial power during the loan repayment period.
In most cases, a lender must know the minimum monthly income. This enables an analysis of the beneficiary’s ability to repay.
Although threshold levels could differ regarding the amount one may want to borrow and based on the different policies that various lenders pursue, domestic helpers can be assured they are earning enough to qualify before applying. Income confirmation can sometimes be complemented with bank statements or recent pay slips that support an individual’s income.
Residential or Work Permit
Domestic helpers are supposed to hold updated work permits matching their contracts to avoid problems in loan applications. Therefore, domestic helpers should have valid residential or work permits in foreign countries for loans. This will enable the permit to prove that the applicant’s work and stay are legal. In most instances, the lender requires a copy of such a permit to be updated, and employment status must be disclosed.
For this reason, an invalid, missing, or expired permit may automatically disqualify the applicant for a loan.
Sponsorship or Employer’s Consent
Some countries require domestic helpers to get their employer’s consent for the loan they want to take out. This serves as consent to the lender that the employer is aware of and agrees with the domestic helper’s financial needs.
Also, some lenders require an employer to sign a consent form or an endorsement letter. This becomes critical when the domestic helper has a not-so-good credit history or a high loan amount. The presence of an employer as a reference builds credibility for the helper before the lender. Consequently, it improves the loan terms regarding interest rates and repayments.
Conclusion
Qualifying for domestic helper loans is essential to getting financial aid through borrowing. It is critical to meet the conditions for approval.
Therefore, equipped with the eligibility criteria requirements, and meeting each requirement to satisfaction, domestic helpers increase their chances of being granted financial assistance.