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Understanding SSS Salary Loan: Coverage, Interest, Borrower Responsibilities

An SSS salary loan is a cash loan granted to an employed, currently- paying self-employed or voluntary member. It is intended to meet the member’s short-term credit needs.

Conditions and Eligibility of Loan

  1. An employed, currently paying self-employed or voluntary member (SE/VM) who has 6 posted monthly contributions for the last 12 months prior to the month of filing of application.
    • For one-month loan, the member-borrower must have 36 posted monthly contributions prior to the month of  filing of application.
    • For a two-month loan, the member-borrower must have 72 posted monthly contributions prior to the month of filing of application.
  2. If the member-borrower is employed, the employer must be updated in contributions and loan remittances.
  3. The member-borrower must be updated-current in the payment of other member loans, which include educational, stock investment, MADE & housing loans granted under the Unified Housing Loan program (UHLP) or direct from SSS.
  4. The member-borrower has not been granted final benefit (total permanent disability, retirement and death).
  5. The member-borrower has not been disqualified due to fraud committed against the SSS.

Interest and Penalty

  • The loan shall be charged an interest rate of 10% per annum based on diminishing principal balance, and shall be amortized over a period of 24 months
  • Interest of 10% shall continue to be charged on the outstanding principal balance until fully paid
  • Any excess in the amortization payment shall be applied to the outstanding principal balance
  • Loan amortization not remitted on due date shall bear a penalty of 1% per month until the loan is fully paid.

Service Fee

A service fee of 1% of the loan amount shall be charged and deducted from the proceeds of the loan.

Loan Renewal

  • Renewal shall be allowed after payment of 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.

Employer’s Responsibilities

  • The employer shall be responsible for the collection and remittance to the SSS of the amortization due on the member-borrower?s salary loan through payroll deduction.
  • The employer shall deduct the total balance of the loan from any benefit/s due to the employee and shall remit the same in full to SSS, in case the member-borrower is separated voluntarily (e.g., retirement or resignation) or involuntarily (e.g., termination of employment or cessation of operations of the company).
  • The employer shall report to the SSS the effective date of separation from the company and the unpaid loan balance of the employee, through the collection list, if the benefit(s) due the employee is insufficient to fully repay his loan.
  • The employer shall require a new employee to secure from the SSS an updated statement of his account.
  • The employer shall deduct and remit to SSS any outstanding loan balance of new employees.

Member-Borrower’s Responsibility

A member-borrower who transfers employment shall submit to his new employer an updated statement of account of any outstanding loan balance with SSS and allow his employer to deduct from his salary the corresponding amortization due, including any interest/or penalty for late remittance.

Deduction of Unpaid Loan From Benefits

In case of default, the arrears/unpaid loan shall be deducted from the benefits claimed by the member, whichever comes first, as follows;

  • For self-employed/voluntary member, deduction shall be from short-term benefits (Sickness/Maternity/Partial Disability).
  • In case of member-borrower’s death, total disability or retirement under Social Security Act, the entire amount or any of unpaid amount of the loan as well as the interest and penalty thereon, if any, shall be deducted from the corresponding benefit.

Other Conditions

Any overpayment on a previous loan shall be applied to the subsequent loan, if any. Otherwise, the overpayment shall be refunded upon request of the member-borrower.
The member-borrower shall notify the Member Services Section of the nearest SSS branch of any change in address/employer thru mail/email/over-the-counter (OTC).

The notice should include the SS number, name and signature of the member-borrower.

List of SSS branches in the Philippines


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