SSS Interest Rate for Salary Loan

SSS Interest Rate for Salary Loan (2025 Guide): How Much You’ll Really Pay

If you’re planning to apply for an SSS Salary Loan, one of the most common questions is:
“Magkano ba talaga ang interest ng SSS loan, at paano ito kinukwenta?”

In this complete and easy-to-understand guide, we’ll break down:

How the 8% interest rate is applied,
What other charges you should expect,
How pro-rated interest works,
And how to compute your exact monthly amortization using the official-style SSS Salary Loan Calculator.

Whether you’re a first-time borrower or renewing your loan, this post will help you understand exactly how much you’ll pay and why.

🧠 What Is the SSS Salary Loan?

The SSS Salary Loan is a short-term cash loan that helps active members cover urgent expenses such as:

Tuition fees or school expenses
Medical emergencies
Daily needs during maternity leave
Unexpected family or household costs

The loan is payable in 12 or 24 months, depending on your contribution history, and is automatically deducted from your payroll if you’re employed.

📈 The Official SSS Interest Rate (2025)

The SSS interest rate is 8% per annum, based on the diminishing principal balance.

This means:

You only pay interest on the remaining balance each month.
As your balance goes down, the interest charged each month also decreases.

So, even if 8% sounds high, it’s actually fair and lower than most personal loans from private lenders (which often charge 20% to 40% annually).

🧮 Example:

If you borrowed ₱20,000 for 24 months:

8% per year = ₱1,600 interest for the first year (on ₱20,000)
But since the balance decreases monthly, total interest is around ₱2,700 only for 2 years.

⚙️ How SSS Computes Interest

Detail	Description
Interest Rate	8% per annum
Basis	Diminishing principal balance
Computation	Monthly interest = 8% ÷ 12 × Remaining Balance
Payment Term	12 months (1-year loan) or 24 months (2-year loan)
Service Fee	1% of approved loan amount (deducted upfront)
Pro-Rated Interest	Interest from loan approval date up to the end of the next month (charged before first amortization)
Late Payment Penalty	1% per month on unpaid amortization

📅 What Is Pro-Rated Interest?

This is a small interest charge that covers the period before your first monthly payment starts.

Example:

Loan approved: March 20, 2025
First amortization starts: May 2025

👉 You’ll be charged pro-rated interest for:

The partial month of March (March 20–31)
The full month of April

That’s why the first deduction only starts in May — SSS already includes those interests upfront to keep payments even afterward.

💵 Example: ₱20,000 Loan for 24 Months

Description	Amount (₱)
Loan Amount	20,000.00
Less: 1% Service Charge	200.00
Net Proceeds (Take-home)	₱19,800.00
Interest Rate	8% per annum
Monthly Amortization	₱904.55
Total Interest (approx.)	₱2,710.00
Total Payable	₱22,710.00

💡 Tip: Even if you pay early, the total interest becomes smaller since you shorten the remaining balance period.
SSS doesn’t charge penalties for early repayment.

📊 1-Year vs. 2-Year SSS Loan: Which Has Lower Interest?

Loan Term	Interest Rate	Monthly Payment	Total Interest	Best For
1-Year Loan (12 months)	8% p.a.	Higher monthly	Lower total interest	Quick payoff
2-Year Loan (24 months)	8% p.a.	Lower monthly	Slightly higher total interest	Easier on monthly budget

Tip: If your goal is to minimize total cost, choose 1-year term.
If you prefer smaller monthly payments, 2-year term is better.

🧾 Full Example: SSS Salary Loan Amortization Table (₱20,000 for 24 Months)

Month	Beginning Balance	Interest (8%)	Principal	Monthly Payment	Ending Balance
1	20,000.00	133.33	771.22	904.55	19,228.78
2	19,228.78	128.19	776.36	904.55	18,452.42
3	18,452.42	123.02	781.53	904.55	17,670.89
4	17,670.89	117.81	786.74	904.55	16,884.15
5	16,884.15	112.56	791.99	904.55	16,092.16
6	16,092.16	107.28	797.27	904.55	15,294.89
7	15,294.89	101.97	802.58	904.55	14,492.31
8	14,492.31	96.62	807.93	904.55	13,684.38
9	13,684.38	91.23	813.32	904.55	12,871.06
10	12,871.06	85.81	818.74	904.55	12,052.32
11	12,052.32	80.35	824.20	904.55	11,228.12
12	11,228.12	74.85	829.70	904.55	10,398.42
13	10,398.42	69.32	835.23	904.55	9,563.19
14	9,563.19	63.75	840.80	904.55	8,722.39
15	8,722.39	58.15	846.40	904.55	7,875.99
16	7,875.99	52.51	852.04	904.55	7,023.95
17	7,023.95	46.83	857.72	904.55	6,166.23
18	6,166.23	41.11	863.44	904.55	5,302.79
19	5,302.79	35.35	869.20	904.55	4,433.59
20	4,433.59	29.56	874.99	904.55	3,558.60
21	3,558.60	23.72	880.83	904.55	2,677.77
22	2,677.77	17.85	886.70	904.55	1,791.07
23	1,791.07	11.94	892.61	904.55	898.46
24	898.46	5.99	898.56	904.55	0.00

🧾 Total Interest: ₱2,710.00
💵 Total Paid: ₱22,710.00

🔢 Try It Yourself

To easily compute your monthly payments, use the free
👉 SSS Salary Loan Calculator

It shows:

Loan amount based on your contributions
Service fee deduction
Interest breakdown
Monthly amortization for 12 or 24 months

Perfect for both employed and voluntary members!

⚠️ Other Charges You Should Know

Charge Type	Rate	When Applied
Service Fee	1% of loan amount	Deducted upon release
Pro-rated Interest	Depends on approval date	Charged before first payment
Late Payment Penalty	1% per month	On unpaid amortization
Loan Renewal Interest (if condoned before)	10% annual	For members who availed penalty condonation in last 5 years

🧾 Quick Eligibility Review

Type	Requirement
1-Year Loan	36 posted contributions, 6 within last 12 months
2-Year Loan	72 posted contributions, 6 within last 12 months
Status	Must be currently employed or self-employed
Other	No existing overdue SSS loan

✅ TL;DR Summary

Key Point	Details
SSS Interest Rate	8% per annum (diminishing balance)
Other Charges	1% service fee, 1% penalty for late payment
Pro-rated Interest	Charged for approval-to-first-month gap
Loan Term	12 or 24 months
Can Pay Early?	Yes, no penalty
Max Loanable	Up to 2× AMSC or ₱50,000

❓ FAQs: SSS Salary Loan Interest

1. Is the SSS interest fixed or variable?

It’s fixed at 8% per annum, but computed on a diminishing balance, meaning the amount decreases every month.

2. What’s the total cost if I borrow ₱10,000?

Expect to pay around ₱11,350 total for 24 months, including interest and service charge.

3. What happens if I pay late?

You’ll be charged 1% penalty per month on the missed amortization.

4. Can I pay in full before the term ends?

Yes! You can settle your balance anytime without penalty, and your total interest becomes smaller.

5. Is 8% interest per year or per month?

It’s per year, not per month — much cheaper than most personal loans or credit card cash advances.

🌟 Final Thoughts

The SSS Salary Loan remains one of the most affordable and accessible government loans in the Philippines.

At only 8% per year, it’s far lower than banks or lending apps — and it gives members a flexible 12–24 month term with no hidden charges.

If you’re planning to apply soon, make sure to:

Keep your SSS contributions updated
Check your loan eligibility
And try the SSS Salary Loan Calculator to see exactly how much you’ll get and pay monthly.

With the right preparation, your SSS Salary Loan can give you safe, low-cost cash when you need it most.