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

Updated 2012:  

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


January 23, 2011:

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.

At first glance, the 10 percent annual interest rate is low, that it’s not even 1 percent a month. But if you actually compute the total cost of the SSS loan, the total interest taken from the borrower is higher than 10 percent.  And there’s still the 1 percent service fee to be considered.

Why? It’s because 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


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  1. Hi, what if I lost the voucher needed to be given to our hr department. Had no idea it should be given to hr. Didn’t read it. What’s the alternative that I can give to hr so they can deduct my loan payment through payroll. thanks!

  2. Hi tanung q lng poh about s loan balance q ang amortization q ai 461 bale nakahulog n poh aqo ng kalahati ndi q poh alamkng ilan nlng balance q nung nagresign aqo..last payment q sss loan q january 2013.ilan n poh interest nun

  3. Hi Ms. Nora,
    Good afternoon, ask ko lang kung anong computation ng monthly premiums na na skip ng 1 month di nabayaran? may penalty po ba ang monthly premiums?

  4. hello po, question po, my first time to get an sss loan:
    1. LOAN AMOUNT PhP 16,000.00
    a. Service Fee (1% of loan amount) PhP 160.00
    b. Balance of previous loan, if any PhP 0.00
    3. NEW PROCEEDS OF LOAN (items 1 less item 2) PhP 15,840.00

    Month Amortization Interest Principal Outstanding Principal Balance
    0 PhP 0.00 PhP 0.00 PhP 0.00 PhP 16,000.00
    1 0.00 0.00 0.00 16,000.00
    2 738.32 133.33 604.99 15,395.01
    3 738.32 128.29 610.03 14,784.99
    4 738.32 123.21 615.11 14,169.88
    5 738.32 118.08 620.24 13,549.64
    6 738.32 112.91 625.41 12,924.24
    7 738.32 107.70 630.62 12,293.62
    8 738.32 102.45 635.87 11,657.75
    9 738.32 97.15 641.17 11,016.58
    10 738.32 91.80 646.51 10,370.06
    11 738.32 86.42 651.90 9,718.16
    12 738.32 80.98 657.33 9,060.83
    13 738.32 75.51 662.81 8,398.01
    14 738.32 69.98 668.34 7,729.68
    15 738.32 64.41 673.90 7,055.77
    16 738.32 58.80 679.52 6,376.25
    17 738.32 53.14 685.18 5,691.07
    18 738.32 47.43 690.89 5,000.18
    19 738.32 41.67 696.65 4,303.53
    20 738.32 35.86 702.46 3,601.07
    21 738.32 30.01 708.31 2,892.76
    22 738.32 24.11 714.21 2,178.55
    23 738.32 18.15 720.16 1,458.38
    24 738.32 12.15 726.17 732.22
    25 PhP 738.32PhP 6.10PhP 732.22PhP 0.00
    I can’t understand what those on the left means, please help

  5. I loaned last year 15,700 something then after 2 months I paid 7k and after 4 months I paid 9k somthing. I thought it had no more interest as it was 24 months to pay but I paid in less than a year in 2 gives. When I came home, I checked my status and saw a balance of 5,699. I was told it was interest for the months I haven’t paid. How much was the monthly interest?

  6. Hi Im Jasmine Nanong i had my 3rd SSS Salary Loan last November 2014 amounting to 23,000 plus. Unfortunately i leave my previous company last June 2015 and got employed only last August 2015. My current company wont allow me to transfer my previous loan and deduct it through my salary can you help me what to do also how much is the total penalty i already have.

  7. Hi Ms Nora, the last time ive checked, here’s the details of my existing unpaid 24k loan:
    Principal : 17,000.00
    Interest : 5,950.12
    Penalty : 8,626.71
    Total Amount Due : 31,576.83
    …and when I check the loan eligibility tab online, it shows:
    * Loan balance is greater than 50% of the total Principal. Outstanding Loan balance : 17,000.00 should be less than or equal to 12,000.00…
    —does this mean I can pay 5,000 so I can renew my loan? Or do I need to also pay the interest and penalty? Can they not deduct the interest and penalties from my total accumulated values/contributions? Thanks in advance.

  8. Hi Jasmine, you can pay your loan by yourself. You can pay at Bayad Center. Any amount, but it’s better if you pay much more than the monthly amortization. Write your name, SSS (Biller), SSS no. and address. Check “Short Term Loan” and write Salary Loan on “Loan Type”. You can also pay at SSS — fill up the ML1 form (do not write on “Employer ID Number. Write your SSS no. Write your name and address on “Employer’s Registered Name & Address”. Write E over R so it will read “Employee’s). Check your loan balance on your online SSS account from time to time to see your outstanding balance.

  9. my sister availed of an SSS loan in 2005 for 24k. today, upon inquiry, it rose to 55k. may i just ask if offsetting is available for sss? in offsetting, i mean, can her loan balance be deducted from her total contributions now? so as to stop incurring any charges and penalties?

  10. Hi charon, sorry but SSS does not do offsetting. SSS is not like Pag-ibig where the final benefit is the total of contributions and dividends. SSS does not add up total contributions to compute pension. It uses a formula based on the average monthly salary credit and no. of years that the member contributed.
    Your sister has to start paying her loan because if she does not, her retirement lump sum or retirement pension later on will be used to pay for her loan.

  11. Hi, Good Morning! Thank you for further explaining. I manually calculated the interest amount using basic math (interest rate/number of months) multiple by the amount left unpaid per month. sa 20,000 within 2 years almost 4,500 pesos din. malaki at mabigat din yan.

  12. Hi Ulysses, yes, you’re right, and thanks for commenting. Compared to major credit card cash loans which add only 0.56 or 0.7 or 0.99% interest per month, that 4,500-peso interest for 2 years is for a loan of 39,000 if through BPI’s Balance Transfer. What’s also making life hard for many members is the interest for unpaid loans. We understand that SSS needs to earn money for members, but we also feel so bad about members failing to pay their loans when they lose their jobs, then find out later that their loans have ballooned to super big amounts.

  13. Hi po, I got an 8k loan oan from SSS and my monthly is 369.16. I failed to pay for 1 year. How much is the interest if ever I pay it in full? thanks po

  14. hi ms.nora, i’m rachel asis. May I ask regarding my sss loan. my first time to loan. I registered online and upon checking, my salary loan is 16k. Will this 16k not change? second question: if 16k is my first loan, how much is the monthly deduction? thnx

  15. Hi rachel, yes, 16k is the maximum loan for members who have paid less than 72 contributions (6 years). Your loanable amount will increase after you have accumulated 72 contributions. I’m not sure, but your monthly amortization for 16k could be 738. I used an online calculator. If you have time later on, would you please comment again and inform us how much is your monthly amortization?

  16. Hi ms. Nora. I got an SSS loan of 10k in 2012 before I left my job. How much is the interest for the 4yrs I haven’t paid? Thanks po

  17. Hi po can I renew my loan? I have a 10k loan po with my previous agency, and I have not paid it but I continued to pay contributions. 40 monthly contributions have been added since last march 2012 when I got my loan.

  18. Hi good morning ms. Nora,
    can we have sample computation of unpaid salary loan with interest?

    thank you.

  19. Hi po,can I renew my loan? I have a 23k loan po with my previous company last 2012 but since I resigned last 2012, and I have not paid it but I continued to pay contributions from 2013 to present. 23 monthly contributions have been added since last march 2012 til present total 113 monthly contributions . can I offset my total contributions to deduct my unpaid loan so I can proceed to renewal of salary loan?

  20. Hi Mam, can I avail sss salary loan renewal if I have unpaid sss salary loan amounting to 23,000 on my previous employer? I received my loan last 2012 but I already resigned but continuously contributed from 2013 to present, as of today I have 113 monthly contribution. Can I offset my contribution to deduct my current sss unpaid loan? more or less 45,000.

  21. Hi Laiza, sorry you’re not allowed to renew your loan because your old loan is delinquent. SSS does not do offsetting like Pag-ibig. But when you have money or when a loan penalty condonation is offered, take advantage of it because you loan will balloon to a huge amount, and might wipe out a big part of your pension later on. Enroll in online SSS so you can check your loan eligibility.

  22. Hi Mrs nora, I got an SSS loan last 0ct 2013 amounting 7,000 and I never paid. If I pay now, what’s the amount now?

  23. Hi po. how much is the yearly interest and yearly penalty of Sss loan? I got a loan of 7500 last 2008, now it’s 19500. We plan to apply for Restructuring Loan Program to lessen the penalty and hopefully pay in full the balance. Thanks in advance

  24. Hi Dada, yes, unpaid SSS loans really balloon fast. The annual interest rate is 10%. Penalty is 1% of any unpaid amount due every month. This is where the loan balloons — the penalty is imposed on unpaid principal, unpaid interest and unpaid penalties from month to month. Yes, if you’re in a calamity zone, you can apply for the loan restructuring program.

  25. Hi Ms. Nora, salie po ito.

    tanong ko po if magkano po ang magiging interest and penalty ng Loan ko.

    Check Date : 06-01-2009
    Check Number : 16643587
    Check Amount : 21,354.42
    Loan Amount : 24,000.00
    Loan Month : 2
    Monthly Amortization : 1,050.00
    First Monthly Amortization : 08-2009

    nag stop po ako ng payment April 2010 (nag resign po kasi ako)

    nag resume lang po ako ng bayad September 2015 (nagka trabaho napo ulit ako)

    pwede ko kaya i Avail ang L. R. P. ng SSS (taga Laguna po ako)

    kelan po mag start ng computation if ever ma approve ako sa LRP?

  26. Hi Ms. Nora, what if I paid at metrobank? and it was posted with another employer po? what should I do?

  27. Hi Mildred, is this your own loan payment? Or loan payments by employees in your company? Did you write an incorrect employer name and incorrect employer SSS no. on the SSS form? If yes, you go to SSS and ask how you can correct it. The employees’ payments might be posted correctly later on, but there could be a conflict with the collection list.
    If it’s your individual payment, as long as you wrote your name and SSS no., it will be posted as your loan payment, right? Check your online SSS account if it will be posted. Wait for about 2 weeks, and if not posted, write a letter to SSS to correct the error. Attach your xerox of your payment receipt. If individual payment, you should not write any other name or no. Write only your SSS no., your name and address.

  28. Hi! Ms. NOra,

    Can you show us example how to compute SSS Salary Loan Amortization?
    Example is Php 26,000.00

    Thanks and Regards,

  29. Hi! Ms. NOra,

    NO need na po for computation sample coz’ I already have the factor rate table and I’ve got the correct amount.

    Thanks and Regards,

  30. Hi Ms. Nora,

    I’m a first timer in comp and ben and i overlooked yung 3 employees namin for their loan payment ng April. napansin ko na lang po nung gagagawa na ako ng loan payment for the month of May and hindi sila nabayaran ng April(which is their first payment dapat)Ang ginawa ko na lang po in-add ko na lang lang ang loan amount ng April ang May. Here is my question pano po kami sisingilin ng SSS for the penalty? and stop na po ba ang penalty ng april since nabayaran na namin sya kasama ng May?

  31. Hello miss nora nakaloan po me ng 10k last 6 years ago and as i remeber d po me pa nakakabayad sa naloan ko. Ask po magkano na utang ko sa SSS and if d po nyo binayaran ito anu po mangyayari? Salamat po

  32. Hi Jaho, it’s better that you see the actual amount. How? Enroll in SSS online service. After successful enrollment, here is how to view your SSS loan balance. Pay your loan asap (there’s a penalty condonation program ongoing until early next year. Here’s the SSS Loan Restructuring Application form and rules). If you don’t pay, your penalties and interests will balloon to a huge amount, and this will be deducted from your pension or lump sum. There are cases that there’s no more pension because the pension has been eaten by the huge loan. What SSS does is it will compute the monthly pension, but it will not give the pension to the member. It will use it to pay the loan from month to month to month until the loan is paid in full. Eh kung malaki na yong loan, kelan matatapos?

  33. Hello po nagloan po ako nung year 2012 kaso after po nun, kinailangan ko magresign s work dahil graduating student po ako.. hindi pa po ako nakaltasan sa loan na yun until now dahil po government employee ako at gsis na kinakaltas smin.. Ano po kaya ang magandang gawin mam?Salamat po

  34. Hi merry, merong loan restructuring program ngayon ang SSS, matatapos sa April 27, 2017. so try your best to apply before the deadline, para mabawasan sa penalties and interests ang iyong loan. Required lang na resident ka sa location na nagkaroon ng kalamidad like Ondoy. Will email you the forms

  35. hi mam nora, magkano kaya ang maavail ko na loan if total contribution ko ay 29k+ balak ko sana magloan.47 months na nman ako sa sss.

  36. Hi po magkano po ang mababawas sa aking unpaid loans kung mkakaavail po ako sa LRP 20.000 pesos po ang n loan ko noong 2009

  37. Hi Nora Asked ko lang bali pang tatlo loan ko sss. mag kano kaya makukuha ko loan sa sss? Ung 1st ko loan – 15k
    2nd ko loan – 32k magkano kaya sa makukuha ko 3rd loan ko?

  38. Hi jr, kung patuloy na maximum na 1,760 ang monthly contributions mo, 32k pa rin ang malo-loan mo. Hindi na tataas kasi as of today, 32k pa rin ang maximum loan amount. Yong sa table of contributions kasi, ang maximum monthly salary credit ay 16k, so 16k x 2 months = 32k. Worth up to 2 months lang ang allowed ng SSS for salary loan.

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