What is the “Principal Amount” Shown in My SSS Loan Statement?
/
What is the “Principal Amount” Shown in My SSS Loan Statement?
When you check your SSS Salary Loan Statement, you’ll see several terms like principal amount, interest, service charge, and amortization. Many members wonder — “Ano ba talaga ang ibig sabihin ng principal amount?” and “Is this the total I need to pay back?”
In this article, we’ll clearly explain what the principal amount means, how it’s computed, and how it affects your monthly payments, using simple examples and SSS’s official computation rules.
🏦 What Is the SSS Salary Loan?
The SSS Salary Loan is a short-term cash loan offered by the Social Security System (SSS) to help members cover personal financial needs. The loan is based on your Monthly Salary Credit (MSC) — the salary bracket used by SSS to compute contributions and benefits.
If you’ve been employed or self-employed with consistent contributions, you can borrow up to one or two months of your AMSC (Average Monthly Salary Credit) depending on your total contributions.
In short:
✅ 1-year loan: Up to one month of AMSC
✅ 2-year loan: Up to two times your AMSC
🕓 Term: 12 or 24 months
💰 Interest: 8% per year, based on diminishing balance
🧾 Service Charge: 1% of approved loan, deducted upon release
💡 What Does “Principal Amount” Mean in Your SSS Loan Statement?
The principal amount is the total loan amount approved by SSS before deductions, such as service charge and pro-rated interest.
Think of it as your “utang na base amount.” This is the figure that SSS uses to calculate your:
Interest (8% per year)
Monthly amortization
Total balance over time
It’s not the same as the amount you receive, because SSS deducts fees before releasing the loan.
🧾 Example: Understanding Principal vs. Net Proceeds
Let’s say you applied for a ₱20,000 SSS Salary Loan.
Item
Amount (₱)
Explanation
Approved Principal
₱20,000
Full amount of loan before deductions
Less: 1% Service Charge
₱200
Deducted by SSS upon release
Less: Pro-rated Interest
₱219.18
Interest for approval-to-start period
Net Proceeds (Released Amount)
₱19,580.82
Actual cash credited to your account
So even if your principal is ₱20,000, you’ll receive only ₱19,580.82 in your bank account.
🧮 How Is the Principal Amount Computed?
Your SSS principal amount depends on your Average Monthly Salary Credit (AMSC) and total number of contributions.
Loan Type
Contributions Required
Loan Amount Basis
Maximum Limit
1-Year Loan
36 posted (6 in last 12 months)
1 × AMSC
₱25,000
2-Year Loan
72 posted (6 in last 12 months)
2 × AMSC
₱50,000
Example:
If your AMSC is ₱10,000, then:
1-year loan = ₱10,000
2-year loan = ₱20,000
Even if your computed AMSC suggests ₱30,000, the maximum cap still applies.
🔢 How Is the Interest Computed?
The SSS Salary Loan has an 8% annual interest rate based on the diminishing balance — meaning the interest gets smaller as you pay down your loan.
Example for a ₱20,000 loan:
Annual interest = ₱1,600
Monthly interest ≈ ₱133
First amortization includes ₱833 principal + ₱133 interest = ₱966 total
As months go by, your interest decreases, and a larger portion of your payment goes toward your principal.
💸 What Is Pro-Rated Interest?
Before your first amortization starts, SSS charges pro-rated interest upfront.
This covers the period from loan approval date up to the end of the following month, ensuring interest is fairly calculated for actual days before payments begin.
Example:
If your ₱20,000 loan is approved on March 12, 2025:
Days covered: 20 days (March) + 30 days (April) = 50 days
Annual interest = ₱1,600 (8% of ₱20,000)
Daily rate = ₱1,600 ÷ 365 = ₱4.38/day
50 days × ₱4.38 = ₱219.18 (pro-rated interest deducted upfront)
You’ll start paying your first amortization in May 2025.
💰 How the Principal Affects Your Monthly Amortization
Your monthly amortization (the fixed amount you pay each month) depends on:
The principal loan amount
The loan term (12 or 24 months)
The 8% annual interest rate
For instance:
Principal
Term
Monthly Amortization
Total Payable
₱10,000
12 months
₱900–₱950
₱10,800–₱11,000
₱20,000
24 months
₱900–₱1,000
₱21,600–₱23,000
💡 Tip: You can check your estimated loan amount and monthly payment using the SSS Salary Loan Calculator.
🧑💼 Who Can Apply for an SSS Salary Loan?
To qualify for the SSS Salary Loan, you must:
✅ Be an active SSS member
✅ Have at least 36 contributions (for 1-year loan) or 72 contributions (for 2-year loan)
✅ Have 6 posted contributions within the last 12 months
✅ Be currently employed (for employed members) or self-employed/voluntary with updated payments
✅ Have no existing overdue SSS loan
📅 How Long Is the Loan Term?
1-year loan: 12 monthly amortizations
2-year loan: 24 monthly amortizations
Interest rate: 8% per year (diminishing)
Service charge: 1% deducted upfront
If you’re employed, your company automatically deducts your monthly payment and remits it to SSS.
⚠️ What Happens If You Miss Payments?
Late payments are charged a 1% penalty per month based on the amount due.
If you fail to pay for several months, SSS can:
Offset your unpaid balance from future benefits (like maternity, sickness, or retirement)
Prevent you from renewing your loan
Impose additional interest and penalties
Pro Tip: Always check your loan statement through your My.SSS account to monitor your remaining balance, due dates, and posted payments.
🔁 Can You Renew Your Loan?
Yes — but only after paying at least 50% of your principal amount and if at least 12 months have passed since your last loan approval.
When you renew:
Your old balance will be deducted from your new loan.
Interest of 10% per annum applies if you availed of penalty condonation within the last 5 years.
1. What is the principal amount in my SSS Loan Statement?
It’s the total loan approved by SSS before deducting service charge and pro-rated interest. It’s the base used for interest computation.
2. Why is my loan release amount smaller than the approved principal?
Because SSS deducts a 1% service charge and pro-rated interest upfront before crediting the funds.
3. Can I pay my SSS Salary Loan earlier than the term?
Yes! You can fully settle anytime without penalties — and you’ll even save on future interest.
4. What happens if I stop working?
Your employer stops deducting payments, but you can continue paying directly to SSS to avoid penalties.
5. How can I check my remaining principal balance?
Log in to your My.SSS account, go to Inquiry → Loans → Salary Loan Information. You’ll see your remaining principal, interest, and due dates.
🏁 Final Thoughts
Understanding your SSS Salary Loan statement helps you manage your payments smartly and avoid surprises.
The principal amount is not the cash you receive, but the official total you borrowed from SSS — the foundation for all interest and amortization computations.
So the next time you review your statement, you’ll know exactly what every number means — and you can plan your finances with confidence.
Kung active ka sa SSS at qualified ka, check mo rin kung magkano ang pwede mong hiramin sa SSS Salary Loan Calculator.
