When cash flow is tight, Filipino workers have a lifeline. They can turn to the Social Security System (SSS) for short-term financial relief under the loan program. Eligible members can get loans based on their contributions. The SSS salary loan is faster than traditional loans and more affordable than credit cards. They are tied directly to your contributions, whether you are employed or self-employed. You can apply for this salary loan online or in person. Keep reading to learn how the loan works, how much you can borrow, and how to repay the loan promptly.
What is an SSS Salary Loan?
The SSS salary loan is a cash loan offered to eligible members of the SSS. It gives quick access to funds, and the amount offered is based on posted monthly contributions. You can get an SSS salary loan in two ways:
One-month Salary Loan: The loan amount is equal to the average of your last 12 monthly salary credits (MSCs).
Two-month Salary Loan: Twice the above-mentioned average, and it's available if you meet the higher contribution requirement.
The SSS salary loan is not a long-term loan. You must repay it in 24 equal monthly installments, and interest is calculated based on the reduction of the principal balance. This means that you pay less interest as you continue repaying the loan based on a diminishing principal balance. This interest computation on the existing principal balance makes it more affordable as you go.
Unlike personal loans from banks, you can easily qualify for an SSS loan. It has a fixed interest rate of 10% per year. It's automatically tied to future SSS benefits, so unpaid loans may affect your eligibility for final claims or retirement payouts, impacting your final SSS benefits.
Who is Eligible for an SSS Salary Loan?
An active SSS member is generally eligible for a salary loan from SSS, provided there are no outstanding balances from any previous loan. The eligibility requirements are:
At least 36 posted monthly contributions for a one-month loan.
At least 72 posted monthly contributions for a two-month loan.
At least 6 contributions made in the last 12 months before the salary loan application.
Below 65 years old at the time of application.
No outstanding balance from previous SSS salary or calamity loans.
Your employer (if employed) must be up-to-date with monthly SSS payments.
For Voluntary, Self-Employed, and OFW Members:
Must have a current My.SSS account.
You need to update your contact details, bank account, and DAEM status before applying.
Self-employed and voluntary members must be actively contributing and not tagged as inactive.
Those applying for an SSS salary loan must provide valid IDs, SS numbers, local mailing addresses, and registered email addresses.
Interest and Fees for SSS Salary Loan
The following interest rates and fees apply for the SSS loan:
Interest rate: 10% per annum based on a diminishing balance.
Service fee: 1% of the approved amount, deducted upfront.
Penalty: 1% per month on overdue payments.
Loan term: 24 months, with fixed monthly amortization.
Enrolment in DAEM (Disbursement Account Enrollment Module)
Borrowers can receive their loan proceeds only when they are enrolled with DAEM. This enables you to get the funds directly into your bank account, e-wallet, or UMID ATM card. DAEM enrolment involves the following steps:
Log in to your My.SSS account.
Go to "E-Services" > "Bank Enrollment".
Choose your preferred disbursement account.
Provide complete details: account number, bank name, and bank branch.
Upload a clear photo of your bank card or statement showing the account number and your name.
If you plan to apply for an SSS loan, ensure that you get DAEM approval well in advance for your preferred disbursement method. The loan may be denied if there is a mismatch in the account holder's name or if the bank is not part of PESONet for SSS salary loan disbursement.
How to complete your loan application for an SSS Salary Loan?
The best way to apply for the SSS salary loan online is through the online channel. You can also visit the SSS branch nearby to process the application. The online application requires the following steps:
Log in at www.sss.gov.ph.
Go to "E-Services" > "Apply for Salary Loan."
Choose your desired loan amount and term.
Confirm your enrolled bank account (DAEM).
Read and accept the loan disclosure statement.
Submit and wait for the confirmation with your loan reference number.
Suppose you don't have My. For an SSS account, you can go to a nearby SSS office and submit the printed application form along with a photocopy of your SS card and account details.
Employer-Assisted Application
Eligible borrowers who are employed members can request that their company's HR department process the loan through My.SSS employer account. In large companies, this method is common. To ask your employer to apply for your salary loan, the following steps are needed:
Submit your application form to HR with a valid ID and bank information.
HR logs in to the company's My.SSS portal.
They confirm your eligibility and submit it on your behalf.
You receive updates through email or SMS once SSS starts processing.
Similar to self-application, if your SSS loan is approved, the funds will be deposited into your bank account. The repayment can be done through automatic salary deduction. After approval, you can expect these funds within 3-5 working days, and you may receive a confirmation email or SMS. You can check your loan application status using the steps given below:
Log in to My.SSS account.
Go to "Inquiry" > "Loan Info" > Salary Loan.
How to Repay SSS Salary Loan?
You must start repaying the loan from the next month after receiving your loan funds. The loan must be repaid in 24 fixed monthly installments, but you may choose to pay early during the repayment of your salary loan.
For Employed Members:
Your employer will handle automatic salary deductions.
Ensure they deduct and remit payments on time.
Missed deductions may lead to penalties or loan default.
If you change your employment status, you must inform the new employer to deduct the loan amortization from your salary. It's the employee's responsibility to update the latest contact information.
The employer is responsible for collecting the due SSS amortization. If the employee retires, resigns, or gets terminated, the employer must deduct the entire outstanding principal and interest from any employee benefits that the employee is entitled to.
In case the salary of the employee is insufficient to make the amortization due, the employer must properly inform through the Payment Reference Number (PRN) – Loan Collection List (LCL) under the Real-Time Processing of Loans (RTPL) program.
For voluntary members, self-employed, or OFWs:
You must pay manually using your Payment Reference Number (PRN).
PRNs are generated per due date. Without it, payments won't post.
You can pay through:
SSS-accredited payment centers
Bayad Center
Banks
SSS Mobile App
GCash or PayMaya, if linked
My.SSS account via online partners
What Happens if I Miss Loan Payments?
Missing loan details and payments incur a penalty of 1% per month. Even if you miss by a fraction of a month, a full month's penalty will apply to the unpaid principal.
If you fail to pay your monthly payments for 6 months continuously, it will be considered a loan default. This will become due and demandable. Interest of 10% per annum will be charged on the outstanding principal. Further, a penalty of 1% per month on unpaid principal and interest is also applicable. The SSS will offset the unpaid amount from your retirement benefit. It also has claims on disability or death benefits that you may be eligible for later on.
How to Monitor SSS Salary Loan?
It's important to monitor your loan status and ensure that timely payments are properly recorded. A small delay in making your monthly payment may result in a penalty for the entire month. Here's how you can track your loan through My.SSS account:
Click "Loan Info" to view:
Principal Balance
Monthly amortization
Outstanding balance
Posted payments
Ensure that your payments are properly updated and report any discrepancies. You can make advance payments or make full payments early, too. You may be required to pay the unpaid principal and accrued interest, if any.
Takeaway
The SSS Salary Loan provides a straightforward solution to borrow money if you know the right process. Before applying for the loan, enroll with DAEM and check your eligibility. Submitting your loan application online is quick and easy, and funds can be transferred directly to your bank account. Repayments follow a fixed schedule, and you can track your loan account to ensure that due payments are made accurately.
