What Are the Deductions Listed in the SSS Salary Loan Disclosure Statement?
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What Are the Deductions Listed in the SSS Salary Loan Disclosure Statement?
Why Your Loan Release is Less Than Expected
Have you ever noticed that the amount credited to your bank account is lower than the approved SSS Salary Loan amount? Don’t worry — you’re not being shortchanged. These differences are due to the standard deductions that SSS applies to every salary loan to cover interest, fees, and previous obligations.
Understanding these deductions is crucial so that you can avoid surprises and better plan your finances when borrowing from the Social Security System (SSS).
Before we break down the items in your SSS Salary Loan Disclosure Statement, let’s quickly recall how the SSS Salary Loan works.
💡 Quick Overview: How the SSS Salary Loan Works
The SSS Salary Loan is a short-term cash loan available to active SSS members with at least 36 posted contributions (6 within the last 12 months). It’s designed to help employed, self-employed, or voluntary members cover short-term financial needs.
The loan amount depends on your Average Monthly Salary Credit (AMSC) — essentially the average of your most recent 12 posted monthly contributions.
You may apply for:
1-year loan → up to one (1) month of your AMSC
2-year loan → up to two (2) months of your AMSC
📋 Main Deductions in the SSS Salary Loan Disclosure Statement
When SSS approves your loan, the approved amount is different from the net amount released to your account. The difference comes from several deductions that are automatically applied. Here’s a detailed breakdown:
1️⃣ Service Charge (1% of the Approved Loan)
Description: This is a one-time processing fee for administering the loan.
Computation Example: If your approved loan is ₱20,000, the service charge is: ₱20,000 × 1% = ₱200
Purpose: Covers administrative costs for processing and releasing the loan. ✅ This deduction is always present and shown clearly in your disclosure statement.
2️⃣ Pro-Rated Interest (8% per annum)
Description: Interest is charged from the approval date until the end of the following month, before your regular monthly amortization begins.
This is called pro-rated interest — interest for the partial period before the first amortization.
Example Calculation: Let’s say your ₱20,000 loan is approved on March 12, 2025.
Days covered: 20 days (March 12–31) + 30 days (April) = 50 days
Annual interest = ₱20,000 × 8% = ₱1,600
Daily interest = ₱1,600 ÷ 365 = ₱4.38
Interest for 50 days = ₱4.38 × 50 = ₱219.18
So ₱219.18 will be deducted upfront before SSS releases your loan.
📘 This ensures fairness — you only pay interest for the actual period before your first payment.
3️⃣ Outstanding Loan Balance (If Any)
If you have an existing unpaid SSS loan, SSS automatically deducts the remaining balance from your new loan proceeds.
Example: If you had a previous salary loan with ₱1,500 unpaid, that amount will be deducted from your new loan before release.
💬 Tip: Always check your SSS online account for any existing balances before applying for a new one.
4️⃣ Loan Renewal Interest or Penalty (If Applicable)
If you previously availed of a penalty condonation (loan restructuring or amnesty) within the last 5 years, SSS applies a 10% interest rate on your new loan instead of the standard 8%.
This means a slightly higher deduction due to interest recalculation.
5️⃣ Overdue Contribution or Benefit Overpayment (If Any)
In some cases, if you owe SSS due to overpayment of previous benefits or unpaid contributions, SSS may deduct these amounts from your loan proceeds.
This is rare but possible for members with pending adjustments or delinquent accounts.
Summary Table: Typical Deductions
Deduction Type
Description
Example on ₱20,000 Loan
Service Charge
1% of loan amount
₱200
Pro-Rated Interest
8% p.a. for days before 1st payment
₱219.18
Outstanding Balance
Previous unpaid loan
₱1,500 (if any)
Penalty/Condonation
10% interest if applicable
varies
Overpayment Adjustment
Deducted if member owes SSS
varies
✅ Net Amount Received Example: ₱20,000 – ₱200 (service charge) – ₱219.18 (interest) = ₱19,580.82 (excluding other obligations or penalties)
🧮 How to Estimate Your SSS Salary Loan Amount
If you want to check how much you’ll actually receive after deductions, try using the SSS Salary Loan Calculator.
It automatically estimates:
Loanable amount based on contributions
Interest and service charge
Approximate take-home amount
💡 This tool is especially useful if you’re planning to renew your loan or compare 1-year vs 2-year loan options.
📘 Understanding “Net Proceeds” vs “Approved Amount”
Approved Amount → The total loan value based on your AMSC and eligibility. Net Proceeds → The actual amount you’ll receive after all deductions.
Formula:
Net Proceeds = Approved Loan - (Service Charge + Pro-rated Interest + Other Deductions)
This is why your bank or GCash credit may look smaller than expected — because SSS already applied all relevant deductions before releasing your funds.
⚖️ Why These Deductions Are Important
These deductions aren’t penalties — they are standard financial safeguards that ensure:
Fair computation of interest (based on actual usage period)
Automatic settlement of any existing obligations
Administrative sustainability of the SSS loan program
By understanding these, members can better manage loan renewals and avoid unexpected deductions.
💰 Loan Repayment: What Happens After Release
Once your loan is released:
Monthly amortizations begin after the pro-rated interest period.
Payments are automatically deducted from your salary by your employer.
If you’re self-employed or voluntary, you’ll need to remit payments manually.
Late payments incur 1% penalty per month on the unpaid amortization.
💬 Good news: You can also pay in advance or fully settle your loan anytime — no prepayment penalty applies.
⚠️ Common Issues and How to Avoid Them
1. “Why did I receive less than my friend?”
Different factors affect deductions — such as approval date (affecting pro-rated interest) and existing balances.
2. “Why was my loan credited late?”
SSS usually releases the loan within a few days after approval, but bank processing times may vary.
3. “Can I get the full amount next time?”
You can’t avoid deductions like the 1% service charge and pro-rated interest, but you can avoid balance offsets by fully paying your existing loan first.
🤰 Can I Apply for a Salary Loan During Maternity Leave?
Yes! If you are actively employed and have updated contributions, you may still apply for an SSS Salary Loan even while on maternity leave.
Your employer just needs to continue reporting you as employed during the leave period.
❓ Frequently Asked Questions (FAQs)
1. Why is my SSS Salary Loan release smaller than the approved amount? Because SSS deducts the 1% service charge, pro-rated interest, and any outstanding balances or obligations.
2. What is the service charge in SSS Salary Loan? It’s a 1% processing fee deducted upfront.
3. How is the pro-rated interest computed? It’s based on 8% annual interest for the days between approval and the end of the following month.
4. Will SSS deduct my previous unpaid loan automatically? Yes, any unpaid balance from a previous loan is automatically deducted from your new loan proceeds.
5. Can I still get the full approved amount? No, deductions are mandatory. But you can minimize them by settling old balances before applying.
🏁 Final Thoughts
Your SSS Salary Loan Disclosure Statement may look intimidating at first, but every deduction listed there serves a clear purpose.
By knowing how each fee is computed, you gain full control over your loan and avoid confusion when your net proceeds are credited.
So before applying, take a few minutes to compute your estimated loan using the 👉 SSS Salary Loan Calculator and plan your finances confidently!
