The Government Service Insurance System (GSIS) has started to accept applications for its GSIS Financial Assistance Loan (GFAL) program for personnel of the Department of Education (DepEd) starting May 15.
Under the GFAL program, GSIS will lend a maximum amount of PhP500,000 to DepEd borrowers to pay the outstanding balance of their loan from accredited private lending institutions. The program was initially planned to pilot in select areas. The agency, however, has decided to open the applications for all teachers and teaching personnel nationwide to allow more teachers to benefit from lower interest rate and better payment terms.
“Instead of offering the GFAL to DepEd personnel in selected cities and municipalities on a pilot run, we decided to open it to all teachers and teaching personnel nationwide because we want more teachers to benefit from lower interest rate and better terms of payment from GSIS. Reduced interest rates and smaller amortization spells savings and higher disposable take home pay for our members. This will definitely lighten their load,” GSIS president and general manager Jesus Clint Aranas explained.
GFAL allows qualified borrowers to borrow up to Php500,000 provided they have a take home pay not lower than Php5,000 after deduction of monthly obligations. Consolidation of loans from separate but accredited private lenders may be allowed. The total amount will be transferred to GSIS and the proceeds of the loan will be paid directly by GSIS to the private lending institutions.
“This loan program is a balance transfer and debt-consolidation facility in one. It allows the members to take a second look at their spending habits — if they are heavy borrowers, they might be spending beyond their means. The best thing about GFAL is that the borrowers will go through loan evaluation and counselling process and are required to attend the GSIS Financial Literacy Seminar before taking out the loan to adopt good money management practices,” Aranas added.
Availment of the loan is not compulsory but voluntary on the part of the members.