Typically, when you think of loans, you think housing loans, car loans, and the like. Conversations on loans will only ever sprout when there’s a big ticket item to cover. The SSS actually offers a variety of loan types, ranging from business loans to housing loans.
But if you’re not in the market for a new house, and you aren’t planning to put up a business in the near future, there’s another loan type for you. If you’ve been paying your SSS contributions for at least three years, you’re actually eligible for an SSS member salary loan. The SSS designed this smaller type of loan to help meet members’ short-term credit needs.
How much can I get out of an SSS salary loan?
The short answer is, you can get one to two months of your salary’s worth, depending on how long you’ve been contributing.
You can get as much as a one-month salary loan (which is defined by the SSS as the average of your latest posted 12 month salary credits) as long as you have posted a minimum of 36 monthly contributions. Of those 36 months, six should have been made within the last 12 months.
If you’ve contributed for at least 72 months—again, with six of those being made in the last 12 months, you’re eligible for more—you can get a two-month salary loan (twice the average of your latest posted 12 month salary credits). Of course, if your requirement is actually a smaller amount, you can always opt to borrow less.
If you have an existing loan with SSS, which you haven’t fully paid, there’s a catch. Your outstanding balance will be deducted from the total amount you’re allowed to borrow.
Who can apply for this SSS loan?
All currently employed, and currently contributing self-employed and voluntary members are welcome to apply, as long as they’ve not been granted final benefit yet (such as total permanent disability or retirement and death benefits issued by SSS), are below age 65, and have never been disqualified due to fraud committed against the SSS.
It’s important to remember that you need to check out your employer’s status, too, if you’re employed. An applicant is only eligible if the employer is updated in payment of contributions.
What documents do I need to prepare?
The first step is to fill out your Member Loan Application Form. A pro tip is to use the downloadable PDF and fill it out before printing. You then need to find your SSS digitized ID. In the absence of an SSS digitized ID, you can also submit your E-6 (acknowledgement stub). This must be accompanied by two valid IDs, at least one of which bears a recent photo of yours.
How do I submit my application?
Here comes the interesting part. As of November 2019, members need to be registered on My.SSS, the SSS’s online portal, in order to complete a loan application. Those who don’t have access to a computer or an internet connection need to visit an SSS branch and use the computers over there to do so. If you’re not yet on My.SSS, the first step is to get registered.
Your employer also needs to have a My.SSS account, since your application will be sent over to your employer’s account for verification. Additionally, you need to make sure your employer has submitted an updated Specimen Signature Card (SS Form L-501). This needs to be updated every year, otherwise there may be delays in the processing of your salary loan application.
For OFW members who are unable to visit the local SSS branches, the process is to file their salary loans at the SSS Foreign Representative Offices which are present within certain countries. For countries that don’t have one, they have to send over their documents to someone who can file them in the Philippines. These documents have to be certified by the Philippine Consulate Embassy in the country where they were issued.
How do I pay it off?
The loan is payable over 24 months, starting from the second month after the date of your loan, and can be paid at any SSS branch that has a tellering facility, or an SSS-accredited bank or SSS-authorized payment center. Your payment deadline will be on the 10th, 15th, 20th, 25th, or the last day of the month, depending on the 10th digit of your SS number.
The loan is charged an interest rate of 10 percent per annum, based on diminishing principal balance. This means that for every month in the first year, you pay 1/24 plus 10 percent of your total loan. Assuming you’ve paid off half as scheduled in the first year, you then pay off the remaining 1/12 plus 10 percent of your remaining loan each month of the second year. Basically, the interest you pay on the second year is lower since you’ve already paid off half the amount. These rates, of course, would change in the case of missed or advanced payments.
The SSS salary loan is an easily accessible option if you need a short-term loan—and why not make the most out of your monthly salary deductions? As with any financial decision, it’s important to be well acquainted with the terms and conditions before signing off.