How to Compute Pag-IBIG MPL Loan

Pag-IBIG Fund offers a Multi-Purpose Loan (MPL) program designed to help members with various financial needs such as home improvement, medical expenses, or educational costs. Calculating your Pag-IBIG MPL loan involves understanding the loan amount you can borrow, the interest rate, and the repayment terms. Here’s a detailed guide on how to compute your Pag-IBIG MPL loan.

1. Understand Pag-IBIG MPL Loan Basics

The Pag-IBIG MPL is a short-term loan that allows members to borrow up to 80% of their Total Accumulated Value (TAV) in the Pag-IBIG Fund. TAV includes contributions from both the member and the employer, as well as any accrued dividends.

2. Determine Your Total Accumulated Value (TAV)

To compute your MPL loan amount, first, you need to find out your Total Accumulated Value (TAV). This can be calculated using the following formula:

TAV = Total Contributions + Employer Contributions + Dividends

Here’s a simplified example:

• Member Contributions: PHP 60,000
• Employer Contributions: PHP 30,000
• Dividends: PHP 10,000

TAV Calculation:

TAV = PHP 60,000 + PHP 30,000 + PHP 10,000 = PHP 100,000

3. Compute the Maximum Loanable Amount

Pag-IBIG allows members to borrow up to 80% of their TAV. Using the example above:

Maximum Loanable Amount = TAV x 80% Maximum Loanable Amount = PHP 100,000 x 80% = PHP 80,000

4. Understand the Interest Rate and Loan Term

Pag-IBIG MPL loans typically have a fixed interest rate, which is subject to change based on Pag-IBIG’s policy. As of the latest guidelines, the interest rate for MPLs is around 10.5% per annum, but this rate can vary.

Loan terms for MPLs are usually between 2 to 4 years. For this example, let’s assume an interest rate of 10.5% per annum and a loan term of 2 years.

5. Calculate the Monthly Amortization

To compute the monthly amortization for your loan, use the formula for calculating the fixed monthly payment on an installment loan. The formula is:

$A=\frac{P\cdot r}{1-(1+r{)}^{-n}}$A=1−(1+r)−nP⋅r​

where:

• $A$A = Monthly Amortization
• $P$P = Principal Loan Amount
• $r$r = Monthly Interest Rate (Annual Rate / 12)
• $n$n = Total Number of Payments (Months)

Example Calculation:

• Principal Loan Amount (P): PHP 80,000
• Annual Interest Rate: 10.5%
• Monthly Interest Rate (r): 10.5% / 12 = 0.875% = 0.00875
• Loan Term (n): 2 years = 24 months

Plug these values into the formula:

$A=\frac{80,000\cdot 0.00875}{1-(1+0.00875{)}^{-24}}$A=1−(1+0.00875)−2480,000⋅0.00875​

$A\approx \frac{700}{1-(1.00875{)}^{-24}}$A≈1−(1.00875)−24700​

$A\approx \frac{700}{1-0.8270}$A≈1−0.8270700​

$A\approx \frac{700}{0.1730}$A≈0.1730700​

$A\approx 4,043.35$A≈4,043.35

Your estimated monthly amortization is PHP 4,043.35.

6. Consider Other Fees and Insurance

Pag-IBIG MPLs may also include additional fees, such as loan processing fees and insurance premiums. These should be considered when planning your loan. Check with Pag-IBIG for the current rates and additional charges.

7. Example Summary

Here’s a summary of the example loan:

• Total Accumulated Value (TAV): PHP 100,000
• Maximum Loanable Amount: PHP 80,000
• Annual Interest Rate: 10.5%
• Loan Term: 2 years
• Monthly Amortization: PHP 4,043.35

8. Final Tips

• Check Your Eligibility: Ensure you meet all the requirements set by Pag-IBIG.
• Repayment Plan: Choose a loan term that fits your budget to avoid financial strain.
• Consult Pag-IBIG: For accurate calculations and current rates, consult with Pag-IBIG Fund or visit their official website.

By understanding these components, you can effectively compute and manage your Pag-IBIG MPL loan. Always use official Pag-IBIG tools or consult with their representatives for the most accurate information and calculations.