Guide on How to Apply for SSS Salary Loan [Part 1/2]

So you are looking for some money to use. Maybe you’re into an emergency, or wanting to invest into a small business, or just looking for money to spend that you could pay in installments. Perhaps the SSS Salary Loan can help to you!

The SSS Salary Loan is

A cash loan granted to an employed, currently- paying self-employed or voluntary member. It is intended to meet the member’s short-term credit needs.


Who Are Eligible to Apply for SSS Salary Loan

To qualify for the SSS Salary Loan, the SSS member must meet the following criteria:

  • He or she must be an employed, currently-paying self-employed or voluntary member who has six (6) posted monthly contributions within the last twelve (12) months prior to the month of filing of loan application.
  • If looking to apply for one-month loan, the member must have 36 posted monthly contributions prior to the month of filing of application.
  • If looking to apply for two-month loan, the member must have 72 posted monthly contributions prior to the month of filing of loan application.
  • The member’s employer must be updated in the payment of contribution and loan remittances. The member must also be updated in the payment of other loans with SSS.
How Much Amount can be Applied for the SSS Salary Loan

If the above criteria are met, the SSS member can choose to apply for the one-month loan, or the two-month loan.

  • The one-month loan is equivalent to the average of member’s last twelve (12) monthly salary credits (MSCs), or the amount applied for, whichever is lower. To qualify for the one-month loan, the member must have 36 posted monthly contributions prior to the month of filing of application.
  • The two-month loan is equivalent to twice the average of the member’s last twelve (12 ) MSCs posted, rounded to the next higher MSC, or the amount applied for, whichever is lower. To qualify for the two-month loan, the member must have 72 posted monthly contributions prior to the month of filing of loan application.
  • If there are outstanding balance of other existing short-term loans, the net amount of the loan shall be the difference between the approved loan amount and all outstanding balance of short-term member loans.
Loan Payment Term and Schedule of Payment
  • The loan shall be payable within two (2) years in 24 monthly installments.
  • The monthly amortization shall start on 2nd month following the date of loan, which is due on or before the payment deadline, as follows:
Other Things To Note
  • The loan shall be charged an interest rate of ten percent (10%) per annum until fully paid, based on diminishing principal balance, and shall be amortized payable over a period of 24 months.
  • If the loan is not fully paid at the end of the term, interest of 10% shall continue to be charged on the outstanding principal balance until fully paid.
  • The loan can be renewed after payment of at least fifty percent (50%) of the original loan amount and at least fifty percent (50%) of the loan term has lapsed.
  • Loan amortization not remitted on due date shall bear a penalty of 1% per month until the loan is fully paid.
  • A service fee of 1% of the loan amount shall be charged and deducted from the proceeds of the loan.
Deduction of Unpaid Loan From Benefits

In case of default, the arrearages/unpaid loan shall be deducted from the benefits claimed by the member, whichever comes first, as follows;

  • For self-employed/voluntary member, deduction shall be from short-term benefits (Sickness/Maternity/Partial Disability).
  • In case of member-borrower’s death, total disbility or retirement under Social Security Act, the entire amount or any of unpaid amount of the loan as well as the interest and penalty thereon, if any, shall be deducted from the corresponding benefit.
Employer Responsibilities
  • The employer shall be responsible for the collection and remittance to the SSS of the amortization due on the member-borrower’s salary loan through payroll deduction.
  • The employer shall deduct the total balance of the loan from any benefit/s due to the employee and shall remit the same in full to SSS, in case the member-borrower is separated voluntarily (e.g., retirement or resignation) or involuntarily (e.g., termination of employment or cessation of operations of the company).
  • The employer shall report to the SSS the effective date of separation from the company and the unpaid loan balance of the employee, through the collection list, if the benefit(s) due the employee is insufficient to fully repay his loan.
  • The employer shall require a new employee to secure from the SSS an updated statement of his account.
  • The employer shall deduct and remit to SSS any outstanding loan balance of new employees.
Member-Borrower Responsibilities

A member-borrower who transfers employment shall submit to his new employer an updated statement of account of any outstanding loan balance with SSS and allow his employer to deduct from his salary the corresponding amortization due, including any interest/or penalty for late remittance.

This guide is written into two parts.

Here is the link to the next part.

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