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.
[adsense]
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

137 Comments

  1. Richelle Cubio February 13, 2020
  2. rico solis July 13, 2019
  3. jun p. July 8, 2019
  4. Azriel Nash July 8, 2019
  5. Nora May 9, 2019
  6. Mar May 7, 2019
  7. jun p. April 22, 2019
  8. Lala April 21, 2019
  9. Nora March 6, 2019
  10. Roy Vincent February 28, 2019
  11. Nora July 18, 2018
  12. Edmark Diao July 18, 2018
  13. Edmark Diao July 18, 2018
  14. Nora July 1, 2018
  15. Mary Ann Flores June 27, 2018
  16. Nora June 16, 2018
  17. ghie June 13, 2018
  18. joy sabas June 8, 2018
  19. Jean hisoler May 23, 2018
  20. Nora May 17, 2018
  21. mary joy May 16, 2018
  22. Lel March 1, 2018
  23. Dave December 20, 2017
  24. Dave December 20, 2017
  25. Jasper Paul C. Relana November 21, 2017
  26. Corazon Salamat October 27, 2017
  27. Bethany October 25, 2017
  28. Francel Ann B. Sanchez October 19, 2017
  29. Kim September 12, 2017
  30. REylette battuac September 8, 2017
  31. Pau September 2, 2017
  32. jill August 18, 2017
  33. Charmaine July 19, 2017
  34. Gigi June 28, 2017
  35. jean March 11, 2017
  36. MARKUS January 15, 2017
  37. Nora December 5, 2016
  38. anne December 3, 2016
  39. Nora November 23, 2016
  40. mike November 23, 2016
  41. Nora November 18, 2016
  42. PRINCESS GRACE BORROMEO November 18, 2016
  43. Nissa October 13, 2016
  44. Nora October 13, 2016
  45. jr October 12, 2016
  46. Sherwin August 21, 2016
  47. christine August 19, 2016
  48. Nora August 17, 2016
  49. merry louden perez August 17, 2016
  50. Nora July 23, 2016
  51. Jaho July 22, 2016
  52. Ann June 22, 2016
  53. Emily Jovellana June 10, 2016
  54. Emily Jovellana June 10, 2016
  55. Nora June 4, 2016
  56. Mildred June 3, 2016
  57. salie garcia May 25, 2016
  58. Nora May 23, 2016
  59. Dada May 22, 2016
  60. delight May 11, 2016
  61. Mary Joy May 5, 2016
  62. Nora May 5, 2016
  63. Laiza May 4, 2016
  64. Laiza May 4, 2016
  65. Kristine Lascano March 29, 2016
  66. Nora March 24, 2016
  67. Nora March 24, 2016
  68. andrei March 24, 2016
  69. ronald March 23, 2016
  70. Mykie Dellava March 3, 2016
  71. Nora February 26, 2016
  72. rachel asis February 25, 2016
  73. Nora February 13, 2016
  74. ninky February 13, 2016
  75. Nora February 3, 2016
  76. Ulysses February 3, 2016
  77. Nora February 1, 2016
  78. charon February 1, 2016
  79. Nora January 24, 2016
  80. Gibbs January 24, 2016
  81. Jasmine Nanong January 23, 2016
  82. Geryl January 23, 2016
  83. Graxang January 8, 2016
  84. Graxang January 8, 2016
  85. mildred January 5, 2016
  86. Jesusa December 30, 2015
  87. Jam October 21, 2015
  88. Nora October 14, 2015
  89. Antonina October 14, 2015
  90. lian October 6, 2015
  91. Nora September 14, 2015
  92. Jermane September 13, 2015
  93. Nora September 13, 2015
  94. Jermane September 12, 2015
  95. Nora September 12, 2015
  96. Raissa September 11, 2015
  97. Nora August 18, 2015
  98. Mildred August 4, 2015
  99. Nora August 4, 2015
  100. jeff desierto August 3, 2015
  101. Nora July 21, 2015
  102. Cheenee July 20, 2015
  103. Nora July 20, 2015
  104. Julie Ann Garcia July 18, 2015
  105. Nora June 10, 2015
  106. Chito J. Berdera Jr. June 9, 2015
  107. Nora June 7, 2015
  108. Jackie June 4, 2015
  109. Nora May 6, 2015
  110. Shiela May 5, 2015
  111. Nora April 21, 2015
  112. Mae April 16, 2015
  113. Nora February 12, 2015
  114. Rain716 February 11, 2015
  115. ramon February 4, 2015
  116. Jaype January 26, 2015
  117. Jaype January 26, 2015
  118. Nora January 25, 2015
  119. Jaype January 23, 2015
  120. Nora January 23, 2015
  121. Jaype January 23, 2015
  122. Nora January 23, 2015
  123. Jaype January 23, 2015
  124. Nora November 7, 2014
  125. che November 7, 2014
  126. Nora November 2, 2014
  127. p0p0i November 2, 2014
  128. Nora October 14, 2014
  129. christian October 13, 2014
  130. Nora October 10, 2014
  131. irish October 10, 2014
  132. Nora November 7, 2013
  133. Larry November 7, 2013
  134. Nors September 11, 2013
  135. letlet September 11, 2013
  136. Nors September 5, 2013
  137. jennifer Panis September 3, 2013

Leave a Reply