What is a Salary Loan
A salary Loan is cash loan granted to an employed, self employed, or voluntary member of the Social Security System.
Salary Loan Application Qualifications
1. Must be an employed member or a currently paying self employed or voluntary member of SSS.
2. For a 1 month Loan, the member loan applicant must have paid at least 36 monthly contributions wherein 6 of which must have been made in the last 12 months before the month of loan application.
3. For a 2 month loan, the member loan applicant must have contributed at least 72 monthly contributions wherein 6 of which must have been made in the last 12 months before the month of loan application.
4. If the member loan applicant is currently employed, the member’s employer must be up to date with the payment of contributions and loans.
5. The member loan applicant must also be up to date with the payment loan with SSS.
Loan Amount and Loan Terms
The maximum amount approved by SSS for a 1 month loan is equivalent to the average of the member loan applicant’s 12 monthly salary credits or the loan amount applied for whatever is lower.
A 2 month loan on the other hand is equal to twice the average of the member loan applicant’s last 12 Monthly Salary Credits posted with the agency or the amount applied for whichever is lower between the two.
For Salary Loan, the member loan applicant will be charged with an interest rate of 10% per year until fully paid. The loan interest rate will be based on diminishing principal balance and will be amortized for a span of 24 months.
If the loaned amount is not fully paid within the agreed term, the agency will charge penalties and interest shall be charged continuously on the remaining balance until the loan amount is fully paid. If the member loan applicant has paid at least 50% of the original loan and half of the loan term has lapsed, he will be eligible for loan renewal.
In case the member loan applicant defaulted on his/her loan, the unpaid loan will be subtracted for the loan applicant’s future SSS benefit claim.