How Are Penalties and Interests Calculated in the SSS Loan Statement?
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How Are Penalties and Interests Calculated in the SSS Loan Statement?
Ever wondered why your SSS loan balance doesn’t seem to go down fast—or why there are small extra amounts you didn’t expect? Don’t worry, you’re not alone! Many SSS members get confused when they see “interest” and “penalty” sections in their SSS Salary Loan Statement.
In this guide, we’ll explain how SSS calculates interest, penalties, and pro-rated deductions in a way that’s easy to understand—complete with real-life examples. So next time you check your SSS account, you’ll know exactly where every peso goes.
🧾 What Is an SSS Salary Loan?
The SSS Salary Loan is a short-term cash benefit that helps employed, self-employed, and voluntary members handle sudden financial needs. You can borrow up to one or two times your average monthly salary credit (AMSC) depending on your contribution history.
To qualify:
For 1-month loan: You need at least 36 posted contributions, with 6 in the last 12 months.
For 2-month loan: You need at least 72 posted contributions, with 6 in the last 12 months.
✅ Loan term: Up to 24 months ✅ Interest rate: 8% per annum ✅ Service charge: 1% deducted upon release
Once approved, your amortization is automatically deducted from your salary by your employer and remitted to SSS.
💡 How the Interest in Your SSS Loan Is Computed
The interest rate is 8% per year, based on the diminishing balance—meaning the interest is computed on the remaining unpaid principal, not the full loan amount.
As you pay each month, your principal decreases—so the next month’s interest becomes smaller. That’s the diminishing balance system.
📅 What Is Pro-Rated Interest?
When your loan is approved, SSS charges pro-rated interest for the short period between your approval date and the end of the following month. This covers the time before your regular monthly amortization officially starts.
Example:
Your ₱20,000 loan was approved on March 12, 2025.
SSS counts:
Remaining days in March = 20
Full month of April = 30
Total = 50 days
Now, compute interest:
Annual interest = 8% × ₱20,000 = ₱1,600
Daily interest = ₱1,600 ÷ 365 = ₱4.38/day
50 days × ₱4.38 = ₱219.18
➡️ That ₱219.18 is deducted upfront from your loan proceeds as pro-rated interest.
So if your loan was ₱20,000, your actual cash released will be around ₱19,780 after deducting:
1% service charge (₱200)
₱219.18 pro-rated interest
📉 Understanding Your Amortization
Each month, you pay a fixed amortization that includes both principal and interest.
Let’s simplify:
Month
Beginning Balance
Payment
Interest (0.667%)
Principal
Remaining Balance
1
₱20,000.00
₱900.00
₱133.40
₱766.60
₱19,233.40
2
₱19,233.40
₱900.00
₱128.85
₱771.15
₱18,462.25
3
₱18,462.25
₱900.00
₱123.10
₱776.90
₱17,685.35
4
₱17,685.35
₱900.00
₱117.80
₱782.20
₱16,903.15
5
₱16,903.15
₱900.00
₱112.76
₱787.24
₱16,115.91
6
₱16,115.91
₱900.00
₱107.57
₱792.43
₱15,323.48
7
₱15,323.48
₱900.00
₱102.31
₱797.69
₱14,525.79
8
₱14,525.79
₱900.00
₱97.00
₱803.00
₱13,722.79
9
₱13,722.79
₱900.00
₱91.53
₱808.47
₱12,914.32
10
₱12,914.32
₱900.00
₱86.12
₱813.88
₱12,100.44
11
₱12,100.44
₱900.00
₱80.27
₱819.73
₱11,280.71
12
₱11,280.71
₱900.00
₱75.18
₱824.82
₱10,455.89
13
₱10,455.89
₱900.00
₱69.94
₱830.06
₱9,625.83
14
₱9,625.83
₱900.00
₱64.17
₱835.83
₱8,789.99
15
₱8,789.99
₱900.00
₱58.66
₱841.34
₱7,948.65
16
₱7,948.65
₱900.00
₱52.99
₱847.01
₱7,101.64
17
₱7,101.64
₱900.00
₱47.37
₱852.63
₱6,249.01
18
₱6,249.01
₱900.00
₱41.67
₱858.33
₱5,390.68
19
₱5,390.68
₱900.00
₱35.95
₱864.05
₱4,526.63
20
₱4,526.63
₱900.00
₱30.19
₱869.81
₱3,656.82
21
₱3,656.82
₱900.00
₱24.41
₱875.59
₱2,781.23
22
₱2,781.23
₱900.00
₱18.55
₱881.45
₱1,899.78
23
₱1,899.78
₱900.00
₱12.67
₱887.33
₱1,012.45
24
₱1,012.45
₱900.00
₱6.75
₱893.25
₱0.00
As you can see, the interest portion decreases every month, while the principal portion increases. This is how SSS ensures fair repayment under the diminishing balance rule.
⚠️ What Happens If You Miss a Payment?
If you miss your payment—whether your employer failed to remit on time or you’re a voluntary member—the SSS imposes a penalty of 1% per month on the unpaid amortization amount.
Example:
Let’s say your monthly amortization is ₱968.00, and you missed one month.
Penalty = 1% × ₱968 = ₱9.68
If you missed two months, the second unpaid amount also earns its own penalty.
It may look small at first, but if your payments stay unposted for several months, the penalties add up, especially if multiple amortizations are delayed.
🧮 Let’s Try It: Compute Your Loan Using the SSS Salary Loan Calculator
To understand how your interest, amortization, and possible penalties affect your total balance, try using the SSS Salary Loan Calculator.
You can:
See how much you can borrow based on your AMSC (Average Monthly Salary Credit)
View how much interest you’ll pay
Get your estimated monthly amortization instantly
This helps you plan your payments better—and avoid penalties!
🧭 What If Your Loan Shows Unposted Payments?
Sometimes, your SSS Loan Statement may not reflect your latest payments yet. Don’t panic — this often happens because employer remittances take time to post in the SSS system.
Here’s what you can do:
Check with your employer if payments were already remitted.
Verify through your My.SSS Online Account under “Loans > Loan Info > Statement of Account.”
Wait 1–2 months after payment before expecting updates, as SSS processes bulk data.
If it still doesn’t appear, you can file a payment verification request at the nearest SSS branch.
🪙 Loan Renewal and Interest Rate Adjustment
If you’ve previously applied for loan condonation (where penalties were forgiven), and you’re renewing your salary loan within 5 years, SSS applies a higher interest rate of 10% per annum instead of 8%.
This ensures fairness among members who regularly pay on time.
💬 Real-Life Example: Why the Balance Seems Higher Than Expected
Let’s say Maria took a ₱25,000 salary loan in June 2023. She started paying ₱1,210/month but noticed in her 2024 statement that her balance was still ₱15,000+.
After checking, she realized:
Her employer delayed remitting 3 months’ worth of payments.
Each delayed month earned a 1% penalty.
Her payments posted late, so the balance continued to earn interest.
👉 Moral of the story: Always double-check with HR if SSS payments are updated.
🔁 Can You Settle the Loan Early?
Yes! You can fully settle your SSS loan anytime without penalties. Early repayment stops further interest and avoids penalties.
Simply go to any SSS branch or use your My.SSS portal to generate a loan payment reference number (PRN) for full settlement.
⚖️ Summary (TL;DR)
Interest Rate: 8% per annum (diminishing balance)
Penalty for Late Payment: 1% per month on overdue amortization
Service Charge: 1% of approved loan amount
Pro-Rated Interest: Deducted upfront, covering days between approval and next month’s end
Loan Renewal after condonation: 10% interest
✅ Always check your SSS Salary Loan Statement for updated balances. ✅ Use the SSS Salary Loan Calculator to compute your actual loan, interest, and amortization.
❓ Frequently Asked Questions (FAQs)
1. Why is my SSS loan balance not going down fast? Because SSS applies diminishing interest—so more of your early payments go to interest. As months go by, more goes to your principal.
2. What happens if my employer delays payment? Your account will still accrue a 1% penalty per month until SSS receives the remittance.
3. Can I pay my loan even if my employer hasn’t remitted yet? Yes, you can pay directly at an SSS branch or online once you get your PRN (Payment Reference Number).
4. Is interest deducted before the loan is released? Yes, SSS deducts both the 1% service charge and pro-rated interest upfront before releasing your loan proceeds.
5. How do I know if my loan is already fully paid? Log in to your My.SSS account, go to Loans > Statement of Account, and check your balance. If it’s ₱0.00, congratulations—fully paid ka na!
✳️ Final Tip:
Always keep a record of your SSS transactions. Late or missing remittances can cause confusion later. And before applying for another loan, check your SSS Salary Loan Statement carefully so you’ll know if your previous one is fully settled.
