Using Your SSS Contributions to Apply for a Salary Loan
Photo c/o SSS
One of the great features of being a member of the Social Security System (SSS) is that you can borrow money that can be used to help you with your immediate financial needs. SSS allows you to apply for a cash loan as long as you are currently employed or currently paying as a self-employed or voluntary member. In a way, it falls under the category of salary loans because only employed contributors or similarly eligible contributors are able to avail of it.
There are certain criteria and eligibility requirements you need to meet, and each loan applicant’s situation is different so it can sometimes be confusing. On this blog post, we detail some of the most common inquiries about the SSS salary loan and then attempt to answer them. Read on because we might just answer your burning questions about this particular benefit.
Q. What is an SSS salary loan?
A. If you are a Filipino citizen and you are employed or self-employed, you automatically become a member of SSS. This specific agency provides several benefits to its members, including a type of salary loan that active, paying members can avail of. Member-borrowers can be currently employed, self-employed, or voluntary contributors. This loan is designed to meet the short-term financial needs of the applicant.
Q. Am I eligible to apply for a loan? If so, how much money can I borrow from SSS
A. According to the SSS website, for a one-month loan, the amount is equivalent to the average of the member-borrower’s latest 12 Monthly Salary Credits or MSCs, or the amount applied for, whichever is lower. Meanwhile, the same website states that a two-month salary loan is equivalent 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.
Another simple computation to look at would be, if you have posted 36 monthly contributions, of which six has been within the last 12 months before submitting your application, you can loan up to PHP 15,000 or a one-month salary loan. This is also the usual amount that first-time borrowers can receive (minus taxes).
For a two-month loan, you need to have 72 monthly contributions, with six being posted in the last 12 months as is the case with the one-month loan. You can borrow as much as PHP 30,000 minus taxes for this. If you’re applying for the second time onwards and you have no outstanding payments, this is what you can expect to get.
Finally and most importantly, you must be under the age of 65 when you apply for the loan.
Q. How do I apply for an SSS loan?
A. You can apply for an SSS loan by filling up a loan application form that you can get from any SSS branch or office. Another way to apply is to do it electronically through your online account on the SSS website at https://sss.gov.ph. MoneyMax has created thorough instructions for registering your SSS account online, so make sure to check this link if you haven’t created your account yet.
Make sure to use the right type of browser when you choose to apply for a loan online. The full application requirements are available on the “How to Apply” section on the SSS website.
Q. How long will it take to get the money for the loan I applied for?
A. Loan applications normally take two weeks to one month before they get approved from the time of application whether it’s done online or through paper processing, provided that you have submitted the complete documents. The loaned amount will come in the form of a check, which will be delivered to your employer. You can encash it as soon as you receive it.
Photo c/o Esquire Philippines
Q. What are the repayment terms and schedule of payment for SSS loans?
A. Your loan shall be payable within a period of two years in 24 monthly instalments. The schedule of payment shall start on the second month following the date of the loan, due on or before a payment deadline that depends on the digits on your social security number. Please refer to the table on the SSS website for the payment deadlines.
The amount of money owed shall be deducted from your salary if you’re a regular member. Meanwhile, self-employed or voluntary contributors are expected to make the payment either at an SSS branch with a teller facility, an SSS-accredited bank, or an SSS-authorized payment center.
Q. Can I apply for another loan from SSS with an existing loan?
A. You can only apply for another salary loan when you have paid at least 50% of the principal or at least half of the term has lapsed. For instance, if you get approved for a PHP 15,000 loan, you can only apply again when your remaining balance is PHP 7,500 or after one year of paying. Your outstanding balance will be deducted from your new loan amount.
Q. How much is the penalty for unpaid SSS loans?
A. If you fail to pay the amount on your due date, you’ll incur a penalty of 1% per month until your loan is fully paid. Make sure that your employer is collecting and remitting the amortization on your behalf through salary deduction. If you retire, resign, or get terminated and you have an existing SSS loan, the company shall deduct the total balance of the loan from your final pay and shall be responsible in remitting the same to social security.
Q. Is there an alternative to an SSS loan with a shorter application time?
A. Lucky for you, there is! If you need the money urgently for your short-term financial needs, or if you need to top-up your SSS loan application, you can turn to Blend PH’s salary loans if you’re with an accredited company. Just check out https://blend.ph/salary-loan/ for the complete details.
Q. How is applying for a salary loan on Blend PH different from applying through SSS?
A. With a salary loan from Blend, you can borrow as much as PHP 25,000 on your first application. And because they’re loans with shorter terms, you can be fully paid anywhere between one to six months. Best of all, the processing time can take as little as 24 hours provided that you submit the complete requirements and you have someone to fund your loan.
If you have further questions about using SSS for a salary loan, give them a call on their trunk line at 8920 6401 or their call center at 8920 6646 to 55. To learn more about Blend’s alternative to SSS salary loans, contact these numbers directly during office hours: 8293 3628 or 5310 1743.