MANILA, Philippines - The Social Security System (SSS) said it raised its members' maximum loanable amount and provided more flexible terms.
The agency's revised lending guidelines took effect on December 1.
SSS President and Chief Executive Officer Emilio de Quiros, Jr. said the new guidelines aim to align the SSS salary loan program with prevailing market conditions.
"Amid the current low interest rates, the SSS relaxed its lending terms and conditions that result in a higher maximum loanable amount, bigger net loan proceeds, lower computation of interest payments and earlier loan renewals for members," he said, in a statement.
Under the new salary loan guidelines, members can file for renewal if they have already paid at least 50% of the principal loan amount and at least half of the two-year loan term has lapsed. Previously, members can only renew their loan if the outstanding balance is P500 or lower.
While loanable amount remains based on the average of the members’ latest 12 posted monthly salary credits, the new guidelines provide a maximum salary loan of P30,000, higher than SSS’ previous cap of P24,000.
"Members paying at the current P15,000 maximum MSC become entitled to the full amount of a two-month salary loan, which is now P30,000. As added flexibility, members can indicate how much they want to borrow as long as it is within their loanable amount," de Quiros said.
The loan shall be amortized over a 24-month period and the 10 percent annual loan interest will apply to the diminishing principal balance.
The first year’s 10 percent interest shall no longer be deducted in advance, which translates to bigger net loan proceeds.
Earlier, the SSS deferred the implementation of the guidelines in preparation for its computerized loan system for the changes and to avoid disrupting the processing of members’ applications for the loan penalty condonation program.