The Social Security System (SSS) here in the Philippines offers different types of benefits to its members. And one benefit it gives is by allowing its members to apply and use salary loans. Salary loans are a cash loan that is given to members that are either employed, currently-paying self-employed, or voluntary members. And yes, paying OFW members are applicable to have this as well. The goal is to be able to help the member’s short-term credit needs.
“Who is eligible to apply for the Salary Loan?”
- Any member of SSS that is currently employed, currently contributing self-employed or voluntary members.
- For members who will get the one-month loan, member-borrower must have made 36 posted monthly contributions. 6 months should be within the past year BEFORE the member-borrower has filed for an application.
- For members who will get the two-month loan, member-borrower must have made 72 posted monthly contributions. 6 months should be within the past year BEFORE the member-borrower has filed for an application.
- The employer of the member-borrower must be kept up to date regarding the payment contributions.
- The member-borrow has not been given final benefit. (total permanent disability, retirement, and death)
- During the application period, the member-borrow must be below the age of 65.
- Member-borrowers who have been disqualified for committing fraud against SSS will not be allowed to apply.
“What are its application requirements?”
The following are the documents required of the member-borrower during the application period for the Salary Loan.
- Member Loan Application Form
- SSS digitized ID or E-6 (this is the acknowledgement stub)
- Two valid government IDs, and at least one should have a RECENT photo of the member-borrower
Examples of valid IDs:
- Unexpired Driver’s License
- Postal ID
- Tax Identification Number (TIN) card
- Seaman’s Book
- Overseas Worker Welfare Administration card
- Voter’s Identification card/Certificate of Registration
- Fisherman’s card issued by BFAR
- Birth Certificate
- Senior Citizens card
- Seafarer’s Registration Certificate issued by POEA
- Certificate of Licensure/Qualification documents/Seafarer’s ID and Record Book from Maritime Industry
*If the Salary Loan Application is filed by the Member-borrower’s Authorized Representative, this is what should be brought:
- The fully accomplished Member Loan Application of the member-borrower
- The Authorized Representative’s SS card or at least any two valid IDs BOTH with a signature and one of these valid IDs should at least have a photo
- The member-borrower’s SS card or at least any two valid IDs BOTH with a signature and one of these valid IDs should at least have a photo
- A Letter of Authority (LOA) must be created and signed by both the member-borrower and the authorized representative of the member-borrower
*If the Salary Loan Application is filed by the Member-borrower’s employed/company’s Authorized Representative, this is what should be brought:
- The fully accomplished Member Loan Application of the member-borrower
- The Authorized Company Representative (ACR) card that is issued by SSS
- A Letter of Authority (LOA) must be created and signed coming from the employer and have at least any two valid IDs. BOTH IDs must have a signature and one of these valid IDs should at least have a photo
- The Member-borrower’s SS card, or in cases for its absence, the application for SS card (SS Form E-6) acknowledgement stub and at least any two valid IDs. BOTH IDs must have a signature and one of these valid IDs should at least have a photo
REMINDER! When this is to be presented during the filing of the claim, all supporting documents should be original or certified true copies.
“How is the filing procedure done?”
A member-borrower may opt to file the salary loan application at the branch he/she is most convenient with. Or a member-borrower is registered at My.SSS can opt to submit an online application for the salary loan. The application for salary loan that has been submitted online by an employed member will then be directed to the employer’s My.SSS account for certification. Meaning, the employer must also have an SSS Web account.
FOR OFW MEMBERS, you may also choose to file your salary loan application at any of the SSS Foreign Representatives in selected countries. And in the case that there is no available SSS office in a particular country, you may then choose to send your application AND supporting documents to one of your trusted relatives here in the Philippines along with the authorized letter so that they can file the application for you here at any of the SSS branches.
REMINDER! ANY document that has been issued in another country SHOULD BE authenticated or certified by the PHILIPPINE Consulate Embassy.
REMINDER! The employer should also submit an updated Specimen Signature Card (SS Form L-501) that will be updated yearly in order to prevent delays during the processing of the application for the salary loan.
“What is the Loan Amount I can get?”
- One-month salary loan is equal to the average of the member-borrower’s latest posted 12 Monthly Salary Credits (MSCs), or the amount applied for, whichever is lower.
- Two-month salary loan is equal to twice the average of the member-borrower’s latest posted 12 MSCs, rounded to the next higher monthly salary credit, or amount applied for, whichever is lower.
- The net amount of the loan should be the difference between the approved loan amount all the outstanding balance of short-term member loans.
“What is repayment term and schedule of payment?”
- The loan shall be payable within two years with 24 monthly installments.
- From the second month of the date of loan, the monthly amortization will start. And it is due on or before the payment deadline, which are as follows:
- Payments can be made at any of the SSS branches with the tellering facility, SSS-accredited bank or SSS-authorized payment center.
“What are the interests and penalties?”
- 10% interest rate per annum will be charged with the loan. It will be based on the diminishing principal balance, and shall be amortized over a period of 24 months.
- 10% interest will continue to be charged on the outstanding principal balance until fully paid
- For the amortization payment, for any excess, it will be applied to the outstanding principal balance.
- 1% penalty will be given per month if the loan amortization is not remitted on the said due date, and it will continue until the loan is fully paid.
“How much is the service fee?”
A 1% service fee of the loan amount will be charged and deducted from the proceeds of the loan.
“What are the terms for a loan renewal?”
- A loan renewal will be allowed if at least 50% of the original principal amount and at least 50% of the term has lapsed.
- Proceeds of renewal loan is any amount greater than or equal to zero as long as the outstanding balance on the previous loan is deducted.
“What are the responsibilities of the employer?”
- Collect and remit the SSS of the authorization due on the member-borrower’s salary loan through payroll deduction
- The deduction of the total balance of the loan from any benefit due to the employee and remit the same in full to SSS, in case the member-borrower is separated voluntarily or involuntarily
- Reporting to the SSS the effective date of separation from the company and also the unpaid loan balance of the employee, through the collection list, if the benefits due the employee are insufficient to fully repay the loan.
- The employer should require a new employee to secure from SSS an updated statement of the account.
- Deduction and remittance to SSS of any outstanding loan balance of new employees.
“What are the responsibilities of the member-borrower?”
The member-borrower who will transfer employment is required to submit to his new employer the updated statement of account for any outstanding balance with SSS. He/she should allow his/her employer to deduct from his/her salary the corresponding amortization due. This includes any interest or penalties for late remittance.
“What is the deduction of unpaid loan from benefits?”
In cases of unpaid loan, there will be a deduction from the benefits claimed by the member, and they are as follows:
- For self-employed or voluntary members, the deduction will be taken from the short-term benefits (sickness, partial disability, etc.)
- In the case of the member-borrower’s death, total disability or retirement, the entire amount or any unpaid amount of the loan, including any interests and penalties, will be deducted from corresponding benefit.
“Are there other conditions?”
They are as follows:
- If an overpayment is made, it will then be applied to the subsequent loan. Or the overpayment can also still be refunded if requested by the member-borrower.
- If there is any change in address/email/employer thru email, the Member Services Section of any SSS branch should be notified by the member-borrower, which should include the SS number, name and signature of the member-borrower.
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