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How to Take Advantage of Your SSS Loan Benefit

Use it or you'll lose it.
How to Take Advantage of Your SSS Loan Benefit
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Use it or you'll lose it.

Urban legend has it that during the early 2000s, the height of the It Bag craze, a clever young woman figured out a way to fund a designer bag purchase—by way of an SSS salary loan.  

The details are hazy, but one detail is clear. An SSS salary loan is something you can draw upon when the need, or even in this case—want, arises. That’s fact, not myth.

For those not yet in the know, SSS loans are a benefit to its members, to help meet their short-term credit requirements, or to be more specific about it, “for educational or health needs, purchase of gadgets or any other material”, as expounded by SSS Assistant Vice President for Media Affairs Ma. Luisa Sebastian, in an interview with Female Network.

But is taking out an SSS salary loan, which is easily accessible for most of us who are members, even a good idea? 

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The Pros:

“I applied for an SSS salary loan before I gave birth, in case I needed extra money”, says Celsi L. who works for a software consultancy company. “It was a good thing I had the foresight to do that because I ended up having to undergo a caesarian procedure and that was big help given our huge hospital bill.”

Apart from helping you meet financial obligations and build a solid credit history, it is also a way to check on your status as a member.

“I applied for an SSS salary loan just to see if my company was really posting my contributions”, shares Eloisa T. who used to do clerical work for a small export trading company. She didn’t really need the loan, but went ahead with it out of curiosity and the prodding of her co-workers.

For Shiela V., her mom’s experience was a cautionary tale. “My mom was scheduled to have an operation, so she thought of applying for a loan, only to find out that somebody else had already taken out a loan in her name.”  Needless to say, her mother had to make do without the cushion of some extra cash.

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The Cons:

Of course, with these benefits come serious responsibility. 

Sheila, who works as an HR officer for a retail distribution company says that while an SSS salary loan is just like a personal loan, such that employees can use the loan proceeds at their discretion once they receive it, borrowers must still spend it wisely, and pay it on time to avoid penalty.

So while it may be tempting to take out a loan to join your girlfriends in that much-awaited storybook travel adventure to Tallinn, or use it to splurge on a fancy hotel room in Paris for you and your partner, consider this:

If taking out a loan given your current financial state (a.k.a. no savings) means you run the risk of defaulting on your payments, it will not be worth it.

As with any type of loan, an SSS salary loan comes with fees and interest. There is a 1% service fee on top of the 10% annual interest rate on the outstanding principal balance. Failure to pay your loan on the due date means having to bear a penalty of 1% per month until the loan is fully paid.


“I learned my lesson the hard way,” cautions Eloisa. “When I quit my job to stay at home and take care of my kids, I assumed that the company would settle all my remaining balance payments. Apparently, that didn’t happen.”

When she went to the SSS office years later to resume payment of her contributions as a voluntary member, she discovered that her small P5000 loan had ballooned to P19,000. It was a lesson she had to pay for, far longer than she imagined.

We ask Shiela for the the usual process in getting an SSS Loan through your HR Department. She shares two ways: 


1. Secure and fill-out the SSS loan form. Forms are available online or you may ask your HR Department for a copy.

2. Have your company’s authorized signatory sign the form. Every company has a list of specific signatories, which gets updated annually. It can be found in Form L501. Bring your SSS ID or any two (2) government issued IDs.


3. Some companies have authorized representatives who submit the accomplished loan application forms. For those without authorized reps, the employees themselves file the application. The employee can submit the form to the nearest SSS branch. Sometimes you also need to secure a copy of the L501 form because some branches ask for it.

4. Wait for the SSS check to arrive at your office doorstep or it will directly credited in your enrolled bank account. 


*(Your employer would need to approve this type of loan application) 

1. Sign up and log-in to your SSS account

2. Select the E-Services Tab

3. Click the Apply for Salary Loan link

4. Fill-out the required fields

5. Click Proceed

6. Inform the HRD that you have an online loan application under process.

7. Wait for the SSS check to arrive at your office doorstep or it will directly credited in your  enrolled bank account.

For more about the SSS Salary Loan, visit their website.

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