Goodbye, scammers: SSS now offers loans to pensioners

In Photo: File photo of SSS Main Building in Quezon City.

THE Social Security System (SSS) launched its pension loan program (PLP) on Monday in response to the clamor of senior citizens to put an end to the growing incidence of pensioners falling victim to loan institutions that offer steep interest rates.

The state-run pension fund had a soft launch for its PLP on Monday for the benefit of more than 1.3 million of its retiree pensioners, with the SSS allotting an initial P10 billion as loan exposure amount for the program, with the amount rising to P30 billion when it is
fully implemented.

“For the pilot implementation, PLP will be offered in 20 branches serving the highest number of retiree pensioners. All 171 branches of SSS will accept PLP applications as soon as our system is ready for the full-scale implementation. Our pensioners need not worry if PLP is not yet available in SSS branches nearest them because they may apply in the first 20 branches,” said SSS President and CEO Emmanuel F. Dooc.

The 20 SSS branches that will accept PLP applications during its soft launch starting on Monday include: Diliman, Caloocan, Pasig-Pioneer, New Panaderos in Mandaluyong, Manila, Makati-Gil Puyat, Alabang, Naga, Dagupan, Baguio, Ilagan, Bacoor, Biñan, Cebu, Tacloban, Iloilo Central, Cagayan de Oro, Davao, General Santos and Zamboanga.

“The rates of interest outside by other lenders based on our survey, the lowest would be at 2.5 percent a month. For us it’s just 0.83 percent or up to 3.5 percent a month. It was also pointed out that it can go up to around 49 percent or 48 percent per annum because of extra hidden charges like the handling fee. For us there isn’t any, but we have an additional charge for insurance, the credit life insurance, that provides protection,” he added.

The SSS targets to fully implement the PLP after a month of doing its pilot implementation, pointing out that the pilot stage would enable the state-run pension fund to gauge which areas would have more borrowers.

“Maybe after a month [full implementation], we will see first the experience so we can gauge where there will be more borrowers in which areas, so we can provide the funding for that region,” he said.

Retiree pensioners with ages ranging from 55 to 80 years old at the end of the month of loan term, have no outstanding loan balance and benefit overpayment payable to SSS, have no advance pension under the SSS Calamity Package, and have been receiving their regular monthly pensions for at least six months are qualified to avail themselves of the program.

“The repayment is not quite heavy; it will depend on the terms of payment they choose. We will make sure that the amount they are borrowing is more or less 65 percent of their pension. So there will be a balance that will be retained in their bank account to be used for their other needs,” he added.

The loan will incur an interest rate of 10 percent per annum until fully paid computed on a diminishing principal balance, which shall become part of the monthly amortization. On a monthly basis, the interest rates translates to 0.83 percent to 3.5 percent.

The loan repayment term of the loanable amount will be payable in three, six, or 12 months depending on the multiple of the loan amount and will be deducted from the monthly pension of the borrower.

The maximum loan that can be borrowed is P32,000.

“For further assistance to our pension loan borrowers, we will not charge any service fee like the usual 1 percent charged to all loan applications.

The pension-borrower, however, is required to pay the loan insurance fee through a one-time deduction from the proceeds of the loan. This will secure both the pensioner borrower and his beneficiaries and the SSS should there be an untoward incident that will happen to the former during the repayment period,” he added.

 

Image Credits: Nonoy Lacza

House Manila Leaderboard
ECA 728×90 Leaderboard
Suntrust banner2
mm
Rea Cu is a graduate of Assumption College-Makati with a Bachelor's degree in Communications. She majored in Advertising and is currently the finance reporter of the BusinessMirror.

LEAVE A REPLY

Please enter your comment!
Please enter your name here