THE Government Service Insurance System (GSIS) has urged its members to settle past-due loans by September, to avoid further incurring penalties and charges, and thus reap the full benefits of their pension in the future.
GSIS President and General Manager Jesus Clint O. Aranas said that members can avail themselves of the Enhanced Conso-Loan Plus program, which waives all penalties and surcharges on a member’s existing salary loan account including additional interests, to pay off their overdue loans.
“One way to settle your loan account is by availing of the Enhanced Conso-Loan Plus program, which waives all penalties and surcharges on your existing salary loan accounts, including additional interests. Paying off your loan will also enable you to avail of other GSIS benefits, which you could not otherwise enjoy if you have defaulted on your loans,” Aranas said.
Under its Enhanced Conso-Loan Plus program, GSIS members who have at least 15 years of service with paid premiums may borrow a 12-month salary loan, while those with not less than 25 years of service will be eligible for a 14-month loan. Previously, the credit limit for these members was only 10 times their salary.
Availment of the Enhanced Conso-Loan Plus program will result in the consolidation of the member’s salary loan, restructured salary loan, enhanced salary loan, emergency loan assistance and summer one-month salary. The consolidation will result in the full liquidation of the outstanding balances of the loans, less penalties and surcharges, which are automatically waived under the program.
Aranas explained that when GSIS members fail to pay their amortization for more than six months, their loan accounts become in default.
Starting October 1, the GSIS will automatically set off the computation of pro-rated surcharges and penalties, which is intended to discourage borrowers from defaulting on their loan payments. The GSIS will discontinue its waiver of penalties and surcharges starting October 1 this year.
“If you restructure your salary loan accounts through the Enhanced Conso-Loan Plus, you will avoid the unfailing predicament of having your retirement pay eaten up by your loan balance in due course,” he added.
At present, the GSIS is not collecting penalties and surcharges on past-due loan accounts if the member is in active service, but will not be continued in the long term, as the “automatic waiver” for penalties and surcharges will compound the forgone interest income from the pension fund’s loan investments, which will eventually be disadvantageous to the social insurance fund, according to Aranas.
“We are extending the restructuring scheme under the Enhanced Conso-Loan Plus because we want our members to ease their financial burdens and help them enjoy the full benefits when they retire. But we need to impose a deadline because, in the final analysis, you have to keep your correct monthly amortization and pay off your loans on time,” he said.
Qualified for the Enhanced Conso-Loan program are active GSIS members who have no pending criminal case, are not on leave of absence without pay, and with a net take-home pay that is not less than the minimum amount specified in the General Appropriations Act after the monthly amortization due on the loan has been deducted.
Moreover, a member should have a computed loanable amount of at least P15,000 to be able to qualify under the program.