SSS Salary Loan Interest Explained: How Much You’ll Really Pay (With Calculator Example)
Are you planning to apply for an SSS Salary Loan but not sure how the interest works? You’re not alone — many members wonder how SSS computes the 8% interest, how much they’ll actually receive after deductions, and why their first month has a “pro-rated” interest.
In this guide, we’ll break down everything about the SSS Salary Loan interest rate, from computation and deductions to repayment and loan renewal rules — all explained in simple, practical terms.
🏦 What Is the SSS Salary Loan?
The SSS Salary Loan is a short-term cash loan that helps employed, self-employed, or voluntary members meet their immediate financial needs.
It’s one of the most accessible government loans in the Philippines — no collateral, no co-maker, and easy to apply online through your My.SSS account.
But what makes it important to understand is how the interest and deductions affect the total amount you receive and repay.
💡 Why Understanding the Interest Rate Matters
Many members think that SSS simply deducts “8% per year,” but it’s actually based on a diminishing balance system, meaning you pay interest only on the remaining principal — not on the full loan every month.
Knowing this helps you:
Understand how your monthly amortization is computed.
Avoid confusion when checking your loan release amount.
Plan your monthly budget better (especially during maternity or recovery leave).
📋 Eligibility Requirements
Before we talk about the interest computation, make sure you’re qualified to apply.
✅ For 1-Year Loan (1-Month Salary Credit)
Must have at least 36 posted contributions,
6 contributions within the last 12 months, and
Must be currently employed, self-employed, or voluntary with updated contributions.
✅ For 2-Year Loan (2-Month Salary Credit)
Must have at least 72 posted contributions,
6 within the last 12 months, and
No existing overdue SSS loan.
Even during maternity leave, as long as you are an active SSS member and meet these requirements, you may apply.
💸 How Much Can You Borrow?
Your loanable amount depends on your Average Monthly Salary Credit (AMSC) — the average of your latest 12 monthly contributions.
Type of Loan
Maximum Loan Amount
Example
1-Year Loan
1 × AMSC (max ₱25,000)
If your AMSC is ₱20,000 → you can borrow ₱20,000
2-Year Loan
2 × AMSC (max ₱50,000)
If your AMSC is ₱25,000 → you can borrow ₱50,000
💬 Note: Even if your AMSC is higher, the loan cannot exceed ₱25,000 for a 1-year term or ₱50,000 for a 2-year term.
🧾 SSS Salary Loan Interest Rate and Deductions
Here’s what affects your net amount received:
Description
Rate / Amount
Applied When
Interest
8% per annum (diminishing)
Monthly amortization
Service Fee
1% of approved loan
Deducted upfront
Pro-Rated Interest
Based on days from approval date to end of next month
Deducted upfront
Penalty for Late Payment
1% per month
If amortization not remitted on time
📆 Understanding Pro-Rated Interest (with Real Example)
This is the most misunderstood part — pro-rated interest is charged before your regular amortizations begin.
Example:
Your ₱20,000 loan was approved on March 12, 2025. SSS computes interest from the approval date up to the end of the following month.
Step 1: Count total days covered → March 12–31 = 20 days → Full April = 30 days → Total = 50 days
Step 2: Compute annual interest → 8% of ₱20,000 = ₱1,600 per year
Step 3: Find daily interest → ₱1,600 ÷ 365 = ₱4.38 per day
Step 4: Multiply by days covered → ₱4.38 × 50 = ₱219.18
✅ Result: ₱219.18 is deducted upfront as your pro-rated interest.
You’ll also have the 1% service fee, or ₱200. So your total deductions = ₱219.18 + ₱200 = ₱419.18
💵 Net loan release: ₱20,000 – ₱419.18 = ₱19,580.82
Your regular amortization will start May 2025 (after the pro-rated period ends).
Total interest paid over 24 months ≈ ₱1,700 Total payment = ₱21,700 (including interest)
That’s very fair compared to other lending institutions that charge 10–15% monthly.
🧠 Important SSS Salary Loan Rules You Should Know
1. Loan Renewal Policy
You can renew your loan after paying at least 50% of the original principal. Example: If your loan was ₱20,000, you must have paid at least ₱10,000 first.
2. Loan Default
If you fail to pay for more than 6 months, your loan is tagged as default, and SSS may deduct it from your future benefits (e.g., maternity, sickness, or retirement).
3. Late Payment Penalty
If your employer or you (for self-employed) fail to pay on time, a 1% monthly penalty applies to unpaid amortizations.
4. Early Repayment
You may pay early or fully settle your balance anytime — no penalty.
5. Condonation
If you had a previous salary loan condonation, the next loan may have a 10% annual interest rate instead of 8%.
🧍♀️ Who Can Apply for SSS Salary Loan During Maternity Leave?
If you’re a working mother currently on maternity leave, you can still apply as long as:
Your employer is still active and remitting contributions.
You meet the required number of contributions (36 or 72).
You have no unpaid or overdue SSS loans.
This is especially helpful when maternity benefits are not enough to cover postpartum expenses.
📝 TL;DR (Summary)
Key Detail
Explanation
Interest Rate
8% per annum, diminishing balance
Service Fee
1% of approved loan
Pro-Rated Interest
Charged upfront from approval date to end of next month
Loan Term
24 months (2-year loan) or 12 months (1-year loan)
Eligibility
36 or 72 posted contributions depending on loan type
It’s 8% per annum based on the diminishing balance of your loan.
2. Why is there a deduction before I receive my loan?
That’s due to the 1% service fee and pro-rated interest, which covers the days before your first monthly amortization.
3. When will my first amortization start?
Usually, two months after the approval date — following the end of the pro-rated interest period.
4. Can I still apply even if I’m on maternity leave?
Yes, as long as you’re still an active member with updated contributions and no overdue loans.
5. What happens if I don’t pay my loan on time?
SSS will add a 1% monthly penalty, and may deduct unpaid balances from future benefits.
6. Can I pay off my loan early?
Yes, early or full payment is allowed anytime without extra charges.
✅ Final Thoughts
Understanding how SSS Salary Loan interest works helps you make smarter financial decisions — especially if you’re balancing expenses for your family, maternity, or everyday needs.
Before applying, always check your eligibility and compute your loan using the 👉 SSS Salary Loan Calculator to see the exact deductions and amortizations.
Because when you know your numbers, you’re not just borrowing — you’re borrowing wisely.
