You’d be hard-pressed to find a Filipino who has never heard about a salary loan. If anything, it’s the lifeline of the Filipino masses, especially those who must cover bills and other unexpected payments before the next paycheck comes. Speaking of, an SSS salary loan is a wise choice in these circumstances, and the best part is that it’s not exclusive to employed members.

With this in mind, this comprehensive guide explains how to loan SSS money, the precise SSS loan interest rates, and the preconditions to successfully procure your SSS salary loan.

How Much Does the First SSS Loan Cost?

At first glance, a salary loan is not rocket science. Judging from the name alone, a salary loan is contingent upon one's salary each month. But there is more to it than meets the eye. In the context of SSS salary loans, it is predicated on the contributions made very month by a member, which indicates the Monthly Salary Credit (MSC). This is because not every SSS member is an employee; some are either self-employed or unemployed and thus, contribute voluntarily, 

Therefore, considering this definition, each individual's initial SSS loan amount varies. It depends entirely on one's monthly wages if employed and the member's timely monthly payments. The latter is a primary requirement for non-employees since employees' contributions are automatically remitted by their employers. Voluntary and/or self-employed contributors, on the other hand, do not have such a privilege. 

As stated on the website of the SSS, a "one-month salary loan" is calculated by taking the numerical mean, or average, of the applicant's up-to-date MSCs (Monthly Salary Credits) during the previous twelve (12) months. A two-month loan, in a similar manner, is double the value of a one-month loan, scaled to the nearest 500. However, if the applicant's requested loan value is smaller than the computed MSC average, SSS will approve the former. 

For example, if a borrower requests a ₱20,000 loan and his average MSC over the past 12 months is ₱25,000, SSS will approve the ₱20,000 loan. The fact of the matter is that a worker’s income may change, and non-employed members do not have fixed earnings on a monthly basis. As a result, monthly contributions vary and fluctuate. This explains why the SSS has such rules regarding the MSCs.

Here's a fictional scenario to give you an idea of how to compute a one-month salary loan:

Suppose an employee earns ₱25,000 per month in 2022 and ₱30,000 in 2023. He decided to apply for an SSS salary loan in July 2023. His monthly contribution in 2022 is 13% of his salary, which amounts to ₱3,250. 

In 2023, that increases to 14%, which is ₱4,200. Over the past 12 months, the employee's average MSC is ₱27,500, representing his maximum one-month loan. Double that, and the fictional employee's two-month loan is ₱55,000.

SSS Salary Loan Interest

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In the latest numbers, the annual SSS loan interest is 10% (or 0.83% per month) and is paid based on the reducing balance method (also known as the diminishing principal balance). That is one of the most affordable rates in the country while also being one of the most convenient! 

Of course, the SSS, like any other financial institution, does not tolerate tardy payments. Thus, the organization charges fees and penalties to discourage the practice, although these fees are not as exorbitant as other privately-owned lending companies. 

For example, SSS deducts a 1% service fee. That means if your loan is ₱20,000, the net loan amount is now ₱19,800. Furthermore, a 1% monthly penalty is added if you fail to pay on schedule. If the person receiving the loan struggles to make payments to the extent that the debt is not paid after the loan period has elapsed, additional penalties.

With low monthly payments and the implementation of the reducing balance method, an SSS salary loan carries relatively less risk.

SSS Loan Payment Terms

Each SSS salary loan has a 24-month repayment period. There are no other options otherwise. You can always pay in advance since the borrower can input the amount he or she wants to pay. One thing you need to avoid, though, is late payments because SSS charges additional fees as penalties for those. 

The 24-month repayment term has its pros and cons. One advantage is the low monthly payment amount. The payment for a ₱10,000 loan is only ₱500 a month, which is ridiculously very low. On the other side of the spectrum, a significant disadvantage is that borrowers have to wait at least one year before securing a renewal.

What is Required to Apply for a Loan?

Like any other government-run lending program, there are numerous requirements to qualify for an SSS salary loan. Besides the particulars pointed out in the sections below, the most important prerequisite is that you be a member in good standing.  If you're not, you can forget about it. Now, if you're already a member, you must have a UMID identification card and two more government-issued IDs, such as a driver's license, passport, or Voter's ID.

Registration

Years ago, the SSS decided that loan applicants need to register and submit their applications online. Therefore, you first need a reliable Internet connection as you create an account using My.SSS portal. Provide the needed information accurately. When you register for the portal, you must create a User ID and password that you will use for subsequent logins. 

After registering, you are now able to access the member's portal. Below are the things you need to do when reaching the page and several useful tips to go along with it.

  • In the upper portion of the page, find the E-SERVICES tab. As soon as you see it, pick "apply for a salary loan" and opt for the most accessible and appropriate money disbursement channel for you. 
  • Ensure that you read and understand the accompanying document called the DAEM (Disbursement Account Enrollment Module). Pick out "Agree" and validate your choice.
  • Register your cellphone number if your chosen money disbursement channel is an E-Wallet, such as Gcash or Paymaya. You must enter a bank account number if you want the loan deposits directed to a bank that uses the PesoNET service.
  • Keep in mind that you need an SSS disbursement account affirmation to be able to proceed with your loan request.
  • Knowledge is power, so make an effort to comprehend the loan application's T&C. This will help you comprehend the nuances of the loan process. You can click or select "Proceed" after checking the "I agree" box. (See the next section for more information on completing the application.)
  • Before clicking “Submit,” review the accuracy of your loan disclosure statement.
  • Please keep a record of the transaction number for later use. Go old school by listing the numbers on paper, taking a photo or screenshot, or saving the email from SSS that includes these details.
  • Remember that the SSS processes thousands of applications daily. Please allow ample time for the approval and subsequent disbursement. You will receive reminders about this, and you can also monitor the development of your loan on the website (more on this later).

Filling Up the Application

Filling out an application form is always a hassle for many, but it is necessary, especially in government-related transactions. The SSS Member Loan Application looks daunting with its three pages; however, an applicant only needs to complete Parts I and III on the first page.

The details include:

  • SSS Number
  • Common Reference Number (CRN)
  • Tax Identification Number (TIN) 
  • Birth Date and Home Address
  • Landline Telephone Number, Mobile/CP Number, and Email Address
  • Loan Type and Loan Amount
  • Mode of Payment

Receiving the Decision

The funds from approved loans often arrive at your registered disbursement channel at least three working days and no more than five after the approval date. You can withdraw the proceeds out of an ATM if you have chosen a cash card or a bank account as your disbursement method.

How to Check SSS Loan Status

Let's say you got impatient and wanted to know what's going on with your SSS loan application. What should you do? Patience is required because there is no predetermined timeframe for confirmation after the submission of your loan application. 

As the previous section mentioned, the SSS members’ online platform allows you to monitor the progress of your loan. Sign in to your My.SSS account, navigate to the "Inquiry" tab and then to "Loan Info." You should be able to see where you are in your SSS loan journey.