The Necessity of Taking Out a GSIS Loan

Ok, so there's really no need to get a GSIS loan, or any loan for that matter, specially if you don't need it. But more than half a dozen people have prodded me to take out a GSIS loan because if I don't, someone else will supposedly take one out in my name! How true is that? The fact that more than one person has told me the same thing means that there must be some grain of truth there right? Or maybe it's just a case of double (or triple) hearsay perpetuated into a truth because it's been repeated over and over again?

So confusing.

Anyway, I've been thinking of taking out a GSIS loan because: (1) we're getting the unit next door and will need the extra money to join the two units and for some renovations; (2) it's easy to get a GSIS loan.

Seriously, I asked my loan savvy officemates and apparently all you need to take out a GSIS loan is your GSIS card, at least 20 months in government service and the GSIS kiosk. Pop your card in, choose how much you want to take out and get the proceeds from your Landbank ATM card (a.k.a. the sweldo card) a few days later. Payments are then done through monthly salary deductions.

Interest is at least 12% according to the GSIS website, but my officemate who took out Php198,000 eventually paid Php260,000 in a span of 24 months, making that a good 30%++ interest charge. I have no idea how a GSIS loan compares to personal loans from banks, but I'm sure that the requirements for a GSIS loan are much, much less than the banks'.

The turnover will happen by February of next year so that gives us more than enough time to come up with the needed cash to buy out my brother (a.k.a. the unit owner) and have enough left over for renovation expenses. Hello extreme budgeting and tipid tips!