What will be discussed:
Basically, a Salary loan or Payday loan is a monetary loan provided to borrowers that must be paid in full or on installments when the borrowers receive their next pay check. The loan amounts granted are typically fairly small and are based on the gross amount of money the borrower earns for each pay period. These loans include high interest rates that will usually cause the borrower to acquire additional debt if the loan is not paid back on time. These loans are also called cash advance loans or check advance loans.
So what you might ask is the use of a salary loan?
Well, since it is quick to avail and quick to pay back, there are some people who avail of the salary loans when there is a need to pay for emergency situations like car repair, family expenses or utilities or on the spot medical expenses. Some might have gadgets that just cannot wait until the next salary and need to be paid off soon.
There are many ways to categorize Salary loans. It might fall under Personal loans, Mortgage or Medical loans depending on why the borrower needs to spend the money. And because of the range of uses this loan has, many companies have added Salary loans as one of their services.
If you are thinking about applying for a salary loan think first if you are responsible enough to pay off this loan. You must keep in mind that all types of loans (may it be Mortgage, House, Car, Educational etc.) are debts and usually have interests. Especially, salary must be thoroughly thought about as they are short term loans with higher interest rates than other loans mentioned.
Given this one should be very careful and pay off the loan on or before its maturity date to avoid additional debts. It might be wise to check The Advantages and Disadvantages of Loans before going ahead and applying.
See here for Pag-IBIG Multi-Purpose loan Application Form
Some companies facilitate Pag-IBIG loans for their employees while others don't. So to apply personally for Pag-IBIG Salary Loan, here are the 3 easy steps:
1. Ready all the needed requirements before going to the nearest Pag-IBIG branch. Providecopies of 2 Valid ID's, Latest 1-month pay slip, and duly accomplished Pag-IBIG Multi-Purpose Loan Application Form are the requirements.
2. Secure Employer's information needed to complete the form.
Make sure to duly complete the form especially the Employer section -- Signature of Office Head/ or Authorized Representative, Employer, SSS/GSIS No., Agency Code, and Branch Code to avoid returning back.
3. Bring all the requirements together with your original valid IDs to the nearest Pag-IBIG Branch.
If you will apply at their Ortigas Branch in Pasig (just across SSS), application is at the 4th floor of Westar Bldg. Get a number from the guard and wait for your number to flash on the screen.
When called, present your requirements. It will be check by the personnel in-charge. This is to make sure you are qualified for a loan. If there is no problem with your records, a date will be given to you for the claiming of your check. (More or less 2 weeks after your application).
1. Are they still open after 5PM?
Yes. Pag-ibig Branch in Pasig is still open after 5PM.
2. Where do they base the loan amount?
The amount you can borrow is based on the total number of your contribution.
So for instance, the borrower has a 30-months contribution, this will be multiplied by 200, and then 60% of it would be the loanable amount.
Total no. of Contribution: 30 (Months)
Borrower's Monthly Contribution: x 200 (Employee + Employer Contribution)
= 6,000 x 0.60 = P3,600 (est. loanable amount)
- 24 to 59 months contribution = 60% of the total amount
- 60 to 119 months contribution = 70% of the total amount
- At least 120 months contribution = 80% of the total amount (this is the maximum)
Please also note that if you happen to work in different cities or provinces most probably your monthly contribution record on their system would be insufficient. This is because Pag-IBIG System may not be centralized yet. If that's the case, you need to request to consolidate your contribution so that you will not be lacking in your monthly contribution.
See here for Salary Loan Application Form
Terms and Conditions
A. Eligibility Requirements
1. Only currently employed, currently contributing self-employed or voluntary member is qualified to avail of the salary loan program:
1.1 For a one-month loan, the member-borrower must have 36 posted monthly contributions, six (6) of which should be within the last 12 months prior to the month of filing of application.
1.2 For a two-month loan, the member-borrower must have 72 posted monthly contributions, six (6) of which should be within the last 12 months prior to the month of filing of application
2. If the member-borrower is employed, his employer must be updated in contributions and loan remittances.
3. The member-borrower must be updated in the payment of his obligations in his member loans, which include salary, calamity, emergency, educational, stock investment, Member Assistance for the Development of Entrepreneurship (MADE) and housing loans granted under the Unified Housing Loan Program (UHLP) or direct from SSS
4. The member-borrower has not been granted final benefit, i.e., total permanent disability, retirement and death.
5. The member-borrower must be under sixty-five (65) years of age at the time of application (SSC Res. No. 434 dated 09 November 2005).
6. The member-borrower has not been disqualified due to fraud committed against the SSS.
B. Loan Amount
1. A one-month salary loan is equivalent to the average of the member’s latest 12 monthly salary credits posted
2. A two-month salary loan is equivalent to twice the average of the member’s latest 12 monthly salary credits posted (rounded to the next higher monthly salary credit), but not to exceed P24,000
3. For Salary Loan Early Renewal Program (SLERP), the net amount of the loan shall be the difference between the approved loan amount and the previous loan balance
C. Repayment Terms
The one-month or two-month salary loan shall be payable within two (2) years in 24 equal monthly installments. However, any principal balance after the maturity date of the loan shall continue to accrue interest until fully paid.
D. Interests and Penalty
1. The loan shall be charged an interest rate of 10% per annum until fully paid, based on diminishing principal balance, and shall be amortized over a period of 24 months.
2. Any excess in the amortization payment shall be applied to the outstanding principal balance.
3. Loan amortization not remitted on due date shall bear a penalty of 1% per month.
E. Service Fee
A service fee of 1% of the loan amount shall be charged and deducted from the proceeds of the loan. For SLERP, service fee shall be waived
F. Loan Renewal
1. The loan may be renewed after the prescribed amortization period of two (2) years. Balance of P500 or less shall be deducted from the proceeds of the new loan.
2. For SLERP, the sanctions for loan renewal under the condonation program shall be lifted
G. Schedule of Payment
1. The first amortization shall be paid on the 3rd month following the date of loan, on or before the payment deadline for loans
2. All subsequent remittances shall be made on or before the payment deadlines for loans following the applicable month, at any SSS branch with tellering facility, SSS accredited banks and SSS authorized payment centers
H. Responsibility of Member-Borrower
A member-borrower who transfers employment is obliged to report to the new employer his obligations with SSS and shall allow the new employer to deduct from his salary the corresponding amortization due, plus any penalty for late remittance of amortization.
I. Responsibility of the Employer
1. The employer shall be responsible for the collection and remittance to the SSS of the amortization(s) due on the member-borrower’s salary loan through payroll deduction.
2. The employer shall require a new employee to secure from the SSS an updated statement of his account
3. The employer shall continue the deduction of loan payment for new employees and shall be accountable for its remittance to the SSS
4. 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).
5. 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.
J. Deduction of Unpaid Loans from Benefits
In case of member-borrower’s death, total disability, retirement under the Social Security Act, the entire amount or any unpaid amount of the loan, as well as the interest and penalty thereon, if any, shall be deducted from the corresponding benefit.
K. Other Conditions
1. Any overpayment on a previous loan shall be applied to the subsequent loan.
2. The borrower shall notify the SSS in case of change of address/employer thru mail/e-mail/over-the-counter (OTC). The notice should indicate the name
3. and SS number of the borrower, addressed to the Member Services Section of the nearest SSS branch, and duly signed by the borrower (in case of mail/OTC).
see Government Loans for more details
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