Updated September 21, 2015:
We’re glad that the SSS has improved its salary loan program. In January 2011, I wrote on this blog that SSS salary loans are not really low-cost, compared to some bank loans, such as the Credit-to-Cash of BPI Express Credit and the Easy Pay of BDO Credit Cards.
Now, finally, SSS has listened to members’ concerns, and these are the changes:
1. Maximum loan amount
You can now borrow up to 30,000 pesos. Previous maximum was 24,000 pesos.
2. No more advance charging of interest.
In the past, you don’t get the whole amount of your loan because SSS deducts your first-year interest. Previously, if you’re given the maximum loan of 24,000, you get only 21,360. Now, you will get a much bigger amount. No advance interest deduction.
The only deduction is the service fee, which is 1% of the loan amount. If your loan amount is 30,000 pesos, your service fee will be 300 pesos. If loan amount is 15,000 pesos, the service fee is 150 pesos.
3. Earlier loan renewal date
You can now renew your loan after paying half of your loan and one year has passed since your loan check date. In the past, you have to wait for two years before you can borrow again, and your balance should have been down to 500 pesos or less.
4. Members can write their preferred loan amount.
But your maximum loan amount will still depend on the average of your latest 12 monthly salary credits that have been posted.
The following previous SSS salary loan terms are still being applied:
1. Basis of Loan Amount
Your loan amount still depends on your average monthly salary credit (AMSC) for the 12-month period before your loan application date.
AMSC x 1 — if you have 36 monthly contributions but less than 72 contributions
AMSC x 2 — if you have 72 monthly contributions or more (maximum is 30,000)
2. Term of Loan
Still two years. You pay your loan from month to month over a period of 24 months. SSS will set the monthly amortization amount.
3. Interest Rate
The annual interest rate is still 10%.
4. Eligibility for the SSS Salary Loan
Still the same. You must have paid at least 36 monthly contributions before you can apply for an SSS salary loan. And you must have paid at least 6 contributions within the 12-month period before loan application.
All changes had taken effect last December 1, 2012.
Source: Member News, SSS website
Chart of SSS Contributions, Philippines
SSS Payment Deadlines for SSS Contributions and Salary Loans