Members of the Social Security System (SSS) can look forward to higher salary loan amounts and more flexible terms under the agency’s revised lending guidelines that took effect on December 1, 2012.

SSS President and Chief Executive Officer Emilio de Quiros, Jr. said the new guidelines, which were approved by SSS’ governing board called the Social Security Commission (SSC) last April 18, 2012, aim to align the SSS salary loan program with prevailing market conditions.

“Amid the current low interest rates, the SSS relaxed its lending terms and conditions that result in a higher maximum loanable amount, bigger net loan proceeds, lower computation of interest payments and earlier loan renewals for members,” de Quiros noted.

The SSS deferred the guidelines’ implementation to prepare its computerized loan system for the changes and to avoid disrupting the processing of members’ applications for the Loan Penalty Condonation Program, which was open for availment from April 2 to September 30, 2012.

Under the new salary loan guidelines, members can file for renewal if they have already paid at least 50 percent of the principal loan amount and at least half of the two-year loan term has lapsed. In the past, members can only renew their loan if the outstanding balance is P500 or lower.

De Quiros said that while loanable amount remains based on the average of the members’ latest 12 posted monthly salary credits (MSC), the new guidelines provide a maximum salary loan of P30,000, higher than SSS’ previous cap of P24,000.

“Members paying at the current P15,000 maximum MSC become entitled to the full amount of a two-month salary loan, which is now P30,000. As added flexibility, members can indicate how much they want to borrow as long as it is within their loanable amount,” he added.

The loan shall be amortized over a 24-month period and the 10 percent annual loan interest will apply to the diminishing principal balance. Moreover, the first year’s 10 percent interest shall no longer be deducted in advance, which translates to bigger net loan proceeds.

In an earlier statement, the SSS cited the lack of basis on allegations of loan overcharging and said it adheres to accepted policies on credit-granting. The SSC resolution issued in 2000 and amended in 2004 served as SSS’ guide in administering its salary loan program for the past several years.

“Since there is no ground on overcharging, there is also no basis on the giving of refunds to borrowers,” de Quiros said. “The SSS is open to queries so that we can make clarifications for the benefit of members and stakeholders.”