SSS Salary Loan Interest Rate Is Not As Low As You Think

Update December 2012:   Finally, the SSS improved its salary loan program! Go to our article on the improved SSS salary loan program.


The SSS salary loan interest rate is not as cheap as we think.

It’s important that we remember this so we don’t take our SSS loan lightly, and so that we don’t borrow just to buy things we don’t really need.

In my previous workplace, some of my co-workers borrow money from the SSS thinking the loan is a pure benefit. They spend it all to celebrate their birthdays or to buy fancy gadgets/appliances.

Sa unang tingin kasi, yong 10 percent na annual interest rate ay mababa lang, na wala pang 1 percent a month. Pero kung i-compute mo talaga yong total cost ng loan, mas mataas ang nakuha sa iyo kesa sa 10 percent interest. Idagdag mo pa rito yong 1 percent service fee.

Bakit? Kasi, SSS does not give you the total amount of your loan, as posted in the Loan Amount box. SSS deducts immediately the total interests for the first 12 months.

For example, pag ang loan amount mo ay 20,000 pesos payable in 2 years, SSS doesn’t give you the whole 20,000. It deducts the first-year interest and the one-percent service fee, so you get only about 18,228 pesos. In reality, the total interest you pay would be nearly 4,000 pesos.

I-compare natin sa Credit-to-Cash loan ng BPI Classic Card. (I use BPI as an example, but there are others with similar or lower rates.)  If you borrow 20,000 pesos, you really get 20,000 pesos, and the total interest you would pay for 24 months is about 3,840 pesos.

What I’m really trying to say is:

Although the SSS salary loan interest rate is lower than many others such as pawnshop rates and other bank personal loan rates, hindi pa rin siya ganong kababa.

So, we should not take SSS loans lightly, thinking that they’re super low-cost loans.  We should use them for very important things.

Related Article:   Low Interest Personal Loans in the Philippines


Add a Comment
  1. Sir, please help., I just want to know how much must be my salary loan’s interest and penalty as of now. I had my salary loan with these details:
    Check Amount : 18,690.00
    Loan Amount : 21,000.00
    Loan Month : 2
    Monthly Amortization : 918.75
    First Monthly Amortization : 04-2009
    unfortunately, there was this typhoon Milenyo., the company told us that we can ask the SSS through letter to postpone the start of our monthly amortization by 6 months without penalty.
    in other words, i just did what the company told us…but due to personal reasons, i resigned from the company and i left my sss loan without paying.
    It was only last april 2013 that i started the repayment of my sss loan…please sir, I hope you could help me..thank you in advance and more power!

  2. Hi jennifer, I wished you were able to take advantage of the penalty condonation program offered by SSS last year. You can continue paying any amount you’re able to pay, and then hope for another penalty condonation program next year, so the penalties will be reduced. Have you enrolled in My.SSS? So you can track your payments. Do your best to pay your loan so your pension will not be severely reduced or wiped out. More power to you too.

  3. hello idea po ba kau kung kelan uli ung penalty condonation program nila?mtagal nrin kc ung loan ng asawa ko na hindi nabayaran kc nwalan cya ng trabaho nun.

  4. Hi letlet, sorry, no idea, but we hope there’s another one next year. Email SSS requesting for another condonation program — to add to other letters requesting the same, so SSS might be persuaded. Meanwhile, start saving for payments or making some payments.

  5. Inquiry about my SSS salary loan, since I renew my salary loan in my previous company and some of circumstances i was able to resign,my problem is how can I pay my monthly amortization to pay my loan with my new employer.thanks

  6. Hi Larry, submit your SSS loan voucher to your new employee so they’ll know how much to deduct. If you lost it, enroll in online SSS so you can check your records and print your loan balance. Submit this printout to your HR and tell them your monthly amortization amount.

  7. Hello, I got a loan from SSS. My first payment should have been August but i wasn’t able to pay it. How much interest should I pay on 6,000.00 and monthly amortization of 252.62? Thanks. God Bless.

  8. Hi irish, the penalty is 1% per month, so .01 x 252.62 = 2.5262. So when you pay this Oct, pay 3 x 252.62 plus maybe 8 pesos. Don’t worry about paying more — any excess will be deducted from your principal loan.

  9. Hi, may i ask, i have an outstanding loan with sss. last payment is November 2012. i moved to another company. any idea how much the penalty is? also,since i had it fixed by my company,is it possible to renew my loan? thanks

  10. Hi christian, previously, SSS required loan applicants not to have delinquent loans. I’m not sure if that’s still a requirement. But these days, their main requirements are 2: you have paid at least half of your loan and 1 year has passed since date of loan check. After updating your payments, check your loan eligibility at (I hope the site will be already fully functioning when you check). Penalty is 1% of amount due for the month. Every penalty is added to the current due and then to the next due, with the total again charged with penalty, and so on (cumulative).

  11. How much is the interest of my loan, which i have not paid for 16 months. 371.87 is my monthly deduction. Thanks

  12. Hi popoi, the penalty for past due is 1% per month. I used 2 online calculators and the total penalty is either 476.78 or 435.87. The final total amount depends on the formula being used by SSS.

  13. gud am dis is che from taytay doctors maternity. i have some problem in saving doc on usb of are sss loan contribution of are employee, can u email me manual how to process posting and saving sss loan contribution in usb thank you for your immediate action on this matter che tdmh

  14. Hi che, sorry I’m not very familiar with LMS, but I’ve read that after saving your new loan file, you locate your new loan file in the folder where you installed your LMS program. Look for a .txt file with ___1411.txt (year and month). After finding the file, send it to your USB or copy it to your USB. Will send you the manual after I find it

  15. Hi Ms, when will the sss post the penalty in salary loan payment? this January is the start of my amortization, but I was absorbed from agency to direct. I was absorbed January 16, that’s why the agency told me they no longer deducted for sss loan payment. Will they post my penalty by February?

  16. Hi Jaype, request your direct employer to deduct your full Jan amortizations this Jan 31 payroll. Submit a copy of your SSS loan check voucher. A penalty might appear on your online account, but this will be removed once your direct employer submits its loan collection list for the Jan-to-Mar quarter in April

  17. It means Ms that my pay on feb 15, i’ll ask for deduction for my full amortization? then on feb 28 full deduction also for the month of february to fill the gap? thanks

  18. Hi Jaype, is it written in your voucher that your start of amortization is Jan 2015? Meaning your loan check was dated Nov 2014? And do you mean your first pay with your new employer is on Feb 15? If so, then yes, ask for deduction for your full Jan amortization, and on Feb 28, your full Feb amortization. By your last pay in March, you should have been deducted 3 monthly amortizations, so that your employer can report 3 paid amortizations in April. But of course, ask your new HR.

  19. Thanks Ms. for confirmation, employer also remit payment on salary loan every quarterly same as on the contribution?

  20. Hi Jaype, employers are required to remit employees’ loan payments and contribution payments monthly (or or before the __th day of the following month depending on the 10th digit of the employer’s SSS no.). Collection list is filed every quarter (this is the reason loan and contribution payments are posted on members’ online accounts only after the quarter)

  21. Which means Maam I will see my penalty on the first quarter since I didn’t pay my first amortization scheduled this January?

  22. Ms. If I decided to pay my loan on my behalf not through my employer, I can pay quarterly without penalty?

  23. How much will be my sss salary loan which I did not pay since march 2010?? My original loan is 20 k. I sm an Ofe, I want to pay my loan here in Riyadh,saudi there authorized bank here to pay my sss salary loan??

  24. Hi Ms. Nora, I availed of an SSS loan last 09/2009 and 3 monthly amortization was made thru my company. Payment was not made after that since I resigned. Then last 09/2012 I availed of the SSS loan condonation program under situation 2. I was approved and paid the total amount indicated in full before the required due date of 09/30/2012. I was not able to check it until last Sept 2014 and found out that the payment I made was not posted. After several visit to SSS, they finally posted the payment last 01/2015 but upon checking, there is still amount due with penalty and interest. Is it supposed to be 0 since I paid the amount they computed when i availed the condonation?

  25. Hi Rain716, yes, you’re right, because you paid the correct amount in full before due date. You can write a letter to SSS requesting them to remove the penalties and interests imposed on your loan dated __ because you paid in full before due date __ the amount __ computed when you applied for loan condonation on __. Attach a copy of your loan condonation application and your payment receipt. Xerox these docs and have them stamped-received by SSS.

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