loan product features using 7 bank examples. comparison of product features
TRANSCRIPT
Loan Product FeaturesUsing 7 Bank Examples
Comparison of Product Features
Client Eligibility Criteria
No. of years in operation
Licenses Residency Age
Bank 1 At least 1 yr Resident of either of 3 specific towns for the last 3 years
25 – 60
Bank 2 Last 2 years Resident of town where branch is located for the last 3 years
21 – 60
Bank 3 At least 1 year Resident of the same barangay for at least 3 years
21 – 60
Bank 4 At least 1 year Resident of the same barangay for at least 3 years
21 – 65
Bank 5 At least 2 years LGU and DTI
Resident of the branch area for at least 3 years
18 – 60 and in good health
Bank 6 At least 1 year Preferably with LGU and DTI licenses
Resident of the same barangay for at least 3 years
21 – 65 and in good health
Bank 7 At least 2 years LGU license Resident of the same barangay for at least 1 year and must own house and lot
18 -60 and in good health
Client Eligibility Criteria
ID Business Location Co-Maker
Bank 1 Has some form of ID Within the geographic coverage of MFU
Must be willing to get 2 Co-makers
Bank 2 Has some form of ID Within the geographic coverage of MFU
Must be willing to get 2 Co-makers
Bank 3 Has some form of ID (SSS, GSIS, Driver’s License, Voter’s ID, Business Permit
Within priority areas of MFU Must be willing to get 2 Co-makers
Bank 4 Has some form of ID (SSS, GSIS, Driver’s License, Voter’s ID, Business Permit
Within priority areas of MFU Must be willing to get 2 Co-makers
Bank 5 Has some form of ID Within the geographic coverage of MFU
Must be willing to get 2 Co-makers
Bank 6 Has some form of ID Within the geographic coverage of MFU
Must be willing to get 2 Co-makers
Bank 7 Has some form of ID Within the geographic coverage of MFU
Must be willing to get 2 Co-makers
Client Eligibility Criteria
Others Loans Cash Flow
Bank 1 Must have no outstanding loan and past due record
Prioritize those with daily/weekly sales
Bank 2 Must have no outstanding loan and past due record
Business must generate daily/weekly sales
Bank 3 Those with outstanding loans may qualify if they don’t have past due record
Must pass CI and Cash Flow analysis
Bank 4 Those with outstanding loans may qualify if they don’t have past due record
Must pass CI and Cash Flow analysis
Bank 5 Those with outstanding loan with 5-6 operators must finish paying their loans before they can qualify to borrow from MFU
Business must generate daily/weekly sales
Bank 6 Preferably without loans from other sources, formal or informal
Business must generate daily/weekly sales
Bank 7 Those with outstanding loans may qualify if their loans are current.
Business must generate daily/weekly sales
Loan Size
Minimum Maximum
Bank 1 Php 3,000.00 Php 25,000.00
Bank 2 Php 3,000.00 Php 60,000.00
Bank 3 Php 2,000.00 Php 50,000.00
Bank 4 Php 3,000.00 Php 100,000.00
Bank 5 Php 3,000.00 Php 50,000.00
Bank 6 Php 3,000.00 Php 75,000.00
Bank 7 Php 3,000.00 Php 100,000.00
Interest and Other Charges
Interest Service Charge Others
Bank 1 3% fixed per month, add-on
3% Processing Fee = P50; Notarial = P50; Insurance
Bank 2 3% per month flat
2.5% of loan amount Notarial fee = P100; Insurance = 0.3 -0.7% of loan, depending on loan term; GRT=5% of interest payable
Bank 3 2.5% per month flat,
add-on
3%, deducted upfront Insurance = 0.4 – 1.3% of loan, depending on loan term
Bank 4 3.5% per month flat,
add-on
5%, deducted upfront Insurance; Notarial fee = P100; P25 Miscellaneous (e.g cost of forms used)
Bank 5 2.5% per month flat
3% of loan proceeds for 3 mos.; 5% for 6-
month loan, deducted upfront
Insurance = P13/P1000 loan;Notarial fee = P100
Bank 6 2% per month, add-on
2% of loan amount for 2-3 months; 4% for 4-
6 months
Notarial Fee
Bank 7 2.5% per month, add-on
0.83% per month, add-on
Insurance; pre-deducted
Penalties for late payment
Penalties
Bank 1 P20/day missed
Bank 2 P20/ day missed, or P100/week overdue
Bank 3 6% of delayed installment/day, for daily amortizations; 6% of delayed installment/week, for weekly amortizations
Bank 4 P5/day, for daily amortizations
P5/week, for weekly amortizations
Bank 5 P500/missed payment + 5% of the late amortization, if 3 days past due
Bank 6 5% of loan amortization
Bank 7 100% of the amortization amount of every missed payment
Savings Contribution / Contractual Savings
Savings
Bank 1 5% of principal upon loan release 10% of each loan amortization; contractual Clients not allowed to withdraw from the savings account until loan is fully paid
Bank 2 5% of loan amount upon release 10% of each loan amortization; contractual
Bank 3 Initial deposit of P100 At least 10% of each loan amortization; contractual Clients not allowed to withdraw from the savings account until loan is fully paid
Bank 4 Initial deposit of P100 At least 10% of each loan amortization; contractual Clients not allowed to withdraw from the savings account until loan is fully paid
Bank 5 10% of loan amount, add-on
Bank 6 10% of loan amount, add-on
Bank 7 5% of loan amount, add-on
Loan Term
Term
Bank 1 2 – 6 months
Bank 2 1 – 12 months
Bank 3 1 – 6 months
Bank 4 2 – 6 months
Bank 5 2 – 6 months
Bank 6 2 – 6 months
Bank 7 1 – 6 months
Payment Frequency
Term
Bank 1 Daily / Weekly
Bank 2 Daily / Weekly
Bank 3 Daily / Weekly
Bank 4 Daily / Weekly
Bank 5 Daily / Weekly
Bank 6 Weekly
Bank 7 Daily / Weekly
Guarantee / Security
Term
Bank 1
Spouse/relative as co-borrower Two Co-Makers Deed of Assignment of deposit account/Authority to debit Chattel Mortgage (for loans above P15,000.00) Insurance
Bank 2
Spouse/relative as co-borrower Two Co-Makers Chattel Mortgage Pledge of deposits Insurance coverage
Bank 3
For loans below P25,000.00: Spouse’s signature as co-applicant Two Co-Makers Deed of Assignment of Deposit Account Security Agreement (in the vernacular)
For loans over P25,000.00: Spouse’s signature as co-applicant Chattel Mortgage Deed of Assignment on deposit account
Guarantee / Security
Term
Bank 4 For loans below P20,000 Spouse’s signature as co-applicant Two co-makers Deed of assignment of deposit account Security agreement (in the vernacular)
For loans over P20,000 but less than P50,000 Spouse’s signature as co-applicant Chattel mortgage Deed of assignment of deposit account
For loans greater than P50,000 Spouse’s signature as co-applicant REM Deed of assignment of deposit account
Guarantee / Security
Term
Bank 5 For P3,000 to P5,000 loans Spouse’s signature as co-borrower Must have one co-maker Insurance coverage
For loans greater than P5,000 but less than P40,000 Spouse’s signature as co-borrower Must have one co-maker Insurance coverage Security agreement or chattel mortgage on at least one of the following: serialized assets, equipment, vehicle, inventory Deed of assignment of deposit account
For loans P40,000 up to P50,000: Hard collateral
Guarantee / Security
Term
Bank 6 Must have a spouse/relative as co-borrowerTwo co-makersInsurance coverageSecurity AgreementDeed of assignment of savingsChattel mortgage, on a case-to-case basis, as determined by top management
Guarantee / Security
Term
Bank 7 For loans below P5,000Spouse/relative as co-borrowerTwo co-makersSecurity agreementInsurance
For loans over P5,000 but less than P50,000
Spouse/relative as co-borrowerTwo co-makersSecurity AgreementInsurance
For loans over P50,000
Spouse/relative as co-borrowerTwo co-makersInsuranceHard collateral
For loans P40,000 up to P50,000: Hard collateral
Client Incentives
Bank 1 Clients with perfect repayment can avail themselves of bigger repeat loans, based on adjusted repayment capacity rate (ARCR) and cash flow, with fast loan release of one day
Bank 2 Clients with perfect repayment can avail themselves of bigger repeat loans, based on ARCR and cash flow, with fast loan release of one day.
Bank 3 Speedy access to subsequent loans; Larger subsequent loans
Bank 4 Speedy access to subsequent loans; Larger subsequent loans
Bank 5 Based on ARCR and cash flow, a client may get bigger repeat loans and/or longer maturity period, with fast loan release of within 1-3 days. Clients shall be informed that they cannot qualify for a repeat loan if more than 10% of their payments on their current loan are not on time.
Bank 6 Clients with perfect repayment can avail themselves of bigger repeat loans, based on ARCR and cash flow.
Bank 7 Clients with perfect repayment can avail themselves of bigger repeat loans, based on ARCR and cash flow, with fast loan release of one day.
Client Orientation
Loan Approval Process
Bank 1 Loan application must pass the MF Credit Committee. The Credit Committee meets at least once a week.
Bank 2 Loan application must pass MF Credit Committee. The Credit Committee meets at least once a week.
Bank 3
Loan application must pass the MF Credit Committee. However, the Credit Committee composed of the branch manager and the MFU staff, is responsible merely for evaluating loan applications for recommendation to the Credit Management Director who has the sole authority to approve or deny loan applications up to P150,000. Credit Committee meets twice a week.
Loan Approval Process
Bank 4
Loan application must pass the mini Credit Committee. The Credit Committee, composed of the bank’s VP and Head of Operations, a Board member, and the MFU staff, meets once a week to evaluate applications.
Bank 5 Loans are approved by the Credit Committee at the branch level.
Bank 6 Loan applications must pass mini Credit Committee. The Credit Committee meets weekly.
Bank 7 Loan application must pass the mini Credit Committee. The Credit Committee meets weekly