The Social Security System (SSS) in the Philippines offers its members a variety of benefits, one of which is the SSS Salary Loan. It is a short-term cash loan that provides financial assistance to SSS members who are currently employed or contributing self-employed/voluntary. In this article, we will guide you on how to apply for an SSS Salary Loan, the requirements, and other important details you need to know.
What is an SSS Salary Loan?
The Social Security System (SSS) Salary Loan is a short-term cash loan offered to SSS members who are currently employed or contributing self-employed/voluntary member. It aims to provide financial assistance to members who are in need of immediate cash. The loan amount will be based on the member's monthly salary credit and the number of contributions.
Who are eligible to apply for an SSS Salary Loan?
To be eligible for an SSS Salary Loan, all employed and currently contributing self-employed or voluntary members must have the following eligibility requirements:
For a one-month loan, the member-borrower must have thirty-six (36) posted monthly contributions, six (6) of which should be within the last twelve (12) months prior to the month of filing of application;
For a two-month loan, the member-borrower must have seventy-two (72) posted monthly contributions, six (6) of which should be within the last twelve (12) months prior to the month of filing of application;
In case employed, the member-borrower's employer must have an updated payments of contributions and/or loans;
Age requirement: Must not be over 65 years old at the time of loan application;
Must not have been granted final benefit, i.e., total permanent disability, retirement and death
Must not have been disqualified due to fraud committed against the SSS.
What are the requirements to apply for an SSS Salary Loan?
Before applying for an SSS Salary Loan, apart from the eligibility requirements listed above, the member-borrower must prepare the following requirements:
Must have a My.SSS account
In reference to Circular No. 2020-021 dated August 12, 2020, SSS mandates the online filing of Salary Loan, member-borrower must have their online account
To know how to register in SSS Online, click here.
Must have an approved Disbursement Bank Account
In reference to Circular No. 2020-021, SSS mandates the checkless disbursement of loan proceeds, member-borrower must enroll a personal bank account or e-wallet account.
Must have a valid and active mobile phone number and email address
Must have a valid government-issued ID.
What is a Disbursement Bank Account?
SSS members will have to register their bank account in My.SSS account. Once registered and approved by SSS, the loan proceeds will be credited to the bank account or e-wallet account.
Login to your My.SSS account
Go to E-Services
Click Disbursement Account Enrollment Module (DAEM)
Enter the bank account details or e-wallet account
Upload the screenshot of the bank account which must show your complete name, bank name and account number; if you’re enrolling an e-wallet account like a GCash, provide a screenshot of your mobile app account which must show your complete name and mobile number.
Once all details are checked, tick Agree
Click Enroll Disbursement Account
An email or SMS notification will be received once the Disbursement Account Enrollment is approved. It may take a day or two to process, in case there is no issue. For further information, SSS released Circular No. 2022-019 dated August 18, 2022 on the guidelines in verification or evaluation of proof of account uploaded in the DAEM.
How to apply for an SSS Salary Loan?
In reference to Circular No. 2020-021 dated August 12, 2020, SSS mandates the online filing of Salary Loan, member-borrower must have their online account with the appication. You can apply for an SSS Salary Loan using the online application only. SSS Branches will not receive your Salary loan application anymore,
Online application
Log in to your My.SSS account at www.sss.gov.ph.
Click the E-Services tab and select Salary Loan Application. Make sure you already have an enrolled disbursement account.
Fill out the online application form and click Submit.
Wait for the confirmation email from the SSS.
Check your My.SSS account for the status of your loan application.
What are the terms and conditions of the SSS Salary Loan?
In accordance with the Circulars namely SSC Res. Nos. 316-s.2012 dated 18 April 2012, 561-s.2019 dated 31 July 2019 & 734-s.2019 dated 09 October 2019, following are the terms and conditions of the SSS Salary Loan:
Loan amount
The loan amount will be based on the member's Monthly Salary Credits (MSC) and the number of contributions.
A one-month loan is equivalent to the average of member’s last twelve (12) MSCs, or the amount applied for, whichever is lower.
Example: 1-month loan: Average MSC of P30,000 x 1 = P30,000
A two-month loan is equivalent to twice the average of the member’s last twelve (12) MSCs posted, rounded to the next higher MSC, or the amount applied for, whichever is lower.
Example: 2-month loan: Average MSC of P30,000 x 2 = P60,000
Interest rate
The interest rate for the SSS Salary Loan is 10% per annum. The interest is computed on a diminishing balance method, which means that the interest is based on the outstanding balance of the loan.
Payment terms
The SSS Salary Loan has a payment term of 24 months, with a grace period of 90 days. The loan must be paid in equal monthly installments, which will be deducted from the member's salary or income.
For example, an approved SSS Loan application in May 2023, will have July 1, 2023 as the first monthly amortization.
Service Fee
The salary loan proceeds will be net of a service fee of one percent (1%) of the loan amount.
For example, an approved SSS Loan of P30,000 will be decreased by P300 as a service fee.
Penalty for late payment
If the member fails to pay the loan on time, a penalty of 1% per month will be charged on the outstanding balance until the loan is fully paid.
Loan Renewal
In case of loan, under the new guidelines by the SSS, member-borrowers must ensure that they have paid at least 50% of the original principal amount and at least 12 months or 50% of the loan term has lapsed.
For example, a salary loan amounting to PHP 30,000 was approved on May 17, 2021, you can only apply for another salary loan after a year or in May 2022 and the principal amount of the loan is P15,000 (P 30,000 X 50%) or less.
How to check the status of your SSS Salary Loan application?
You can check the status of your SSS Salary Loan application through your My.SSS account or by contacting the nearest SSS branch.
What is Disclosure Statement on Loan/Credit Transaction?
In compliance with Republic Act 3765 or the Truth in Lending Act, a Disclosure Statement on Loan/Credit Transaction shall be issued by SSS to the member-borrower upon approval of the salary loan application. Please ensure to go through the loan details, schedule of payments and the terms and conditions so you will be able to manage your loan, finances and avoid late charges and penalties.
Sample only:
What are the common reasons for an SSS Salary Loan application denial?
The common reasons for an SSS Salary Loan application denial include the following:
Failure to meet the eligibility requirements
Insufficient number of contributions
Existing outstanding balance or loan with the SSS
Failure to provide complete and accurate information
Failure to submit the required documents
How to pay your SSS Salary Loan?
The SSS Salary Loan can be paid through the following modes:
Salary deduction
Payment through SSS accredited banks and payment centers
Payment through Bayad Centers and SM Business Centers
What are the consequences of not paying your SSS Salary Loan?
Failure to pay your SSS Salary Loan on time can result in the following consequences:
Penalties and interest charges
Forfeiture of future SSS benefits
Legal actions and collection efforts by the SSS
Non-remittance of SSS contributions or loans may result in assessment and penalties with the Social Security System and inconvenienced the employees. Your payroll system must be equipped with the mandatory changes in contributions and can handle the scheduled or timely deductions of loan amortizations. With AanyaHR, there is no need to worry about these changes or deductions as the system automatically handles the loan deductions of employee-borrower. For more features, visit our website at www.aanyahr.com
Source: SSS