What is this loan-restructuring program (LRP) that we have been hearing about? Is this the same as a condonation program? These are some of the questions that members of the Social Security System (SSS) have been asking since the LRP was launched in late-April this year.
The LRP gives SSS members with past-due loans of at least six months an opportunity to settle their obligations under easy terms with the possibility of condonation of penalties when the loan is fully paid.
Under the program, the principal and accrued interests of all past-due short-term loans of a member will be consolidated into one restructured loan. The member may opt to pay the due amount in full, within 30 days from the approval of the restructuring application, or within a minimum term of one year and a maximum term of five years, provided that an interest of 3 percent per annum on a diminishing principal balance shall be charged within the applicable payment term. Also, a penalty of 0.5 percent shall be charged against the amortization due for every month unpaid during the restructuring term.
Members who live or work in areas affected by natural or man-made disasters, not more than 55 years old and have not filed for any final claim with the SSS, and are not disqualified due to fraud committed against the SSS, are qualified to join. Availment period is until April 27, 2017.
Members must personally apply for the LRP over the counter at SSS branches nationwide. If members cannot personally attend to their applications, they must issue a notarized Special Power of Attorney to whoever they are authorizing to transact on their behalf. While the restructured loan is existing or outstanding, members cannot avail themselves of other short-term loans, but they can do so after six months from full payment of the restructured loan. Once members avail themselves of the restructuring program, they are disqualified from joining any future condonation or restructuring programs of the SSS.
To give members the chance to personally apply for the restructuring program, the SSS opened its branches on all Saturdays of September. There is no doubt that the SSS management will be willing to do this again if there is a need to do so.
While the LRP is a good chance for members to restore their good credit standing, it should be emphasized that the condonation of penalties is conditional. Penalties will only be condoned after the full payment of the outstanding principal and interest of the restructured loan within the approved term. The balance of the restructured loan should be zero at the end of the term. Otherwise, the unpaid balance of the restructured loan and the proportionate balance of the condonable penalty will become part of a new principal under a restructured loan part two (RL2). The new balance under RL2 will, henceforth, be charged with an interest rate of 10 percent per annum until fully paid.
It is, therefore, advisable for members to be faithful in paying the restructured loan amortizations in order to avoid further penalties and to fully enjoy the easier terms under it.
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For more details on SSS programs, members can drop by the nearest SSS branch, visit the SSS web site (www.sss.gov.ph), or contact the SSS call center at 920-6446 to 55, which accepts calls from 7 a.m. on Monday all the way to 7 a.m. on Saturday.
Susie G. Bugante is the vice president for public affairs and special events of the SSS. Send comments about this column to susiebugante.bmirror@gmail.com.