The Social Security System (SSS) is urging its retiree-pensioners to avail of the fund’s low-interest loan to cover for their financial needs, instead of borrowing from loan sharks which could charge them as high as 20% interest rate.
In a statement on Tuesday, SSS president and CEO Rolando Macasaet said the private sector workers’ pension fund launched the Pension Loan Program (PLP), which offers a low interest rate of 10% per year “a far cry from those being lent by loan sharks.”
“Aside from the low interest rate, SSS will not require them to surrender their ATM cards as collateral, unlike the practice of some private lending institutions. We also do not charge any processing or service fee when they avail of the pension loan,” Macasaet said.
Under the PLO, qualified retiree-pensioners can borrow a loan of up to three, six, nine, or 12 times their basic monthly pension (BMP) plus the P1,000 additional benefit or their aggregate monthly pension with a maximum loan amount of P200,000.
The SSS also ensures that pensioner borrowers’ net take-home pension would be at least 47.25% of their aggregate monthly pension when they start paying the monthly amortization for the pension loan.
The PLP also has an extended repayment period.
“A pension loan of three and six times the pensioner’s aggregate monthly pension has a payment term of six and 12 months, respectively. On the other hand, a pension loan of nine or 12 times the aggregate monthly pension has a payment term of 24 months,” Macasaet said.
For those availing the PLP, the first monthly amortization for pension loans is due on the second month after SSS granted the loan.
Moreover, the 1% service fee is waived to subsidize the payment for the borrower’s premium of the Credit Life Insurance (CLI).
To qualify for the PLP, the SSS retiree-pensioners must meet the following requirements:
- Must be 85 years of age or below at the end of the last month of the loan term.
- Must have no deductions such as outstanding loan balance, benefit overpayment payable to the SSS, etc., from their monthly pension
- Must have no existing advance pension under the SSS Calamity Assistance Package.
- Must be receiving their regular monthly pensions for at least one month, and the pension status is "Active."
- Must have updated “mailing address and mobile number.”
Interested retiree-pensioners may submit their loan applications at the nearest SSS branch office or through their My.SSS account, according to the pension fund.
Once approved, loan proceeds will be credited to their nominated bank account or UnionBank quick card, within three working days for online applications and five working days if filed over-the-counter through the SSS branch, it said. —VAL, GMA Integrated News