Pag-IBIG Multi-Purpose Loan vs. SSS Salary Loan: Which Should You Get?

If you are an employed member of the Pag-IBIG and the SSS, you shall, at one point, be entitled to salary loans from these government agencies.  The good thing about getting a government-issued personal loan is that they offer low-interest rates compared to getting a loan from the bank or a private lending company.  Your monthly loan payments are deducted from your salary so it’s convenient… and consistent (which is really important in all types of loan repayments!).

So if you have not decided yet if you should get a Pag-IBIG MP Loan or an SSS Salary Loan (or both!), let us help you with the following comparisons, from requirements to eligibility to the amount that you can possibly borrow based on your total contributions.

Read on!

Pag-IBIG Multi-purpose Loan	SSS Salary Loan
Requirements: 24 monthly membership savings Have paid at least one monthly contribution within the last six months before the loan application date. Any other existing Pag-IBIG loan (calamity, housing) must not be in default before applying for an MPL.	Requirements: If the loan is worth your one-month salary, you must have paid at least 36 total monthly contributions. Must have paid at least six monthly contributions within the last 12 months before the loan application date. If your loan is worth two months of your salary, you must have a minimum of 72 total monthly contributions and six monthly contributions within the last 12 months. Must not be over 65 years old and has not received final benefits from the agency such as retirement, total permanent disability, etc.
Loan Amount: The loan amount depends on the member’s preferred loan amount, entitlement, and capacity to pay – whichever is the lowest. A member can borrow up to 80% of his Total Accumulated Value (TAV).  It consists of the member’s monthly contributions, employer’s contributions, and accumulated Pag-IBIG dividends. If you have an existing calamity loan	Loan Amount: SSS members with at least 36 monthly contributions can borrow an amount that is equal to their one-month salary, up to Php 15,000. Members with at least 72 monthly contributions are entitled to a 2-month loan worth twice their salary up to Php 30,000.
Loan Interest Rates and Fees: 10.75% per year throughout the loan term. No processing fee. 0.5% fee is imposed on the unpaid amount for every month of late payment.	Loan Interest Rates and Fees: 10% annual interest rate on the outstanding principal balance. This is based on diminished principal balance; the interest becomes lower as the loan is paid. A service fee of 1% of the total loan amount for each SSS salary loan processing. 1% penalty per month for unpaid months.
How long does it take to process loans? 3 to 5 working days from the date of submission to Pag-IBIG.	How long does it take to process loans? 2 to 3 weeks whether you apply online or at an SSS branch.
How will the loan proceeds be released to the member? Pag-IBIG will issue the borrower a Landbank Cash Card.  This is where the proceeds will be deposited. The borrower will receive a text message when his loan is approved and credited to the cash card.	How will the loan proceeds be released to the member? SSS will send a check payable to the member-borrower. If the borrower has a UMID card activated for ATM functionality, it can also be credited there.
What are the repayment terms of Pag-IBIG? 24-month repayment term. Monthly amortization starts in the second month from the loan approval date. Paid monthly via salary deduction. Self-employed and voluntary members can pay at any accredited banks and payment centers.	What are the repayment terms of Pag-IBIG? 24-month repayment term. Monthly amortization starts in the second month from the loan approval date. Paid monthly via salary deduction. Self-employed and voluntary members can pay at any accredited banks and payment centers.

I actually applied for a Pag-IBIG multi-purpose loan last week.  I will write about my experience next week. Come visit us again!

 

Sources:

www.sss.gov.ph

www.pagibig.gov.ph

 

 

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