How Salary Loan Works In The Philippines?

Salary loans or Payday loans, how many like to call them, are monetary funds provided to borrowers, which must be paid in full or in installments when the borrower receives the next paycheck. The amount you can borrow is relatively small and is based on your monthly income.

However, keep in mind that these types of loans usually involve high-interest rates, which isn’t a suitable solution for many people. In the end, you are repaying much more than you initially borrowed. So, now, you must be wondering why people take salary loans when they are so unfavorable?

Well, you may need some quick cash to pay for emergency situations, such as car repairs, utilities, or on the spot medical expenses. Therefore, if you think of applying for a salary loan, then you must consider whether you are responsible enough to pay off your installments on time. In case you fail to meet any payment, the lender will impose additional charges and fees.

So, let’s see how they work in the Philippines!

Getting a salary loan through a government

Some companies provide Pag-IBIG loans for their employees, while others don’t. However, if you wish to apply for this type of loan, then you must complete the following steps.

First of all, make sure to get familiar with all terms and conditions before you head to the nearest Pag-IBIG branch. Additionally, you should bring copies of government and employment issued IDs, the latest payslip, as well as an application form.

On top of that, you must show the original valid IDs so that the loan officer can start with your application. It will take at least two weeks for your request to be approved. The amount you can borrow is based on your monthly income.

Getting a loan through a social security system

Only people employed or currently self-employed can qualify for the salary loan program. However, as with the previous one, you must meet specific terms and conditions to be able to apply for a salary loan.
For instance, if you request a one-month loan, then you must have 36 posted monthly contributions, and six of them have to be in the last six months. Additionally, if you are applying for this type of service, then your employer should be updated in contributions and loan remittances.

When it comes to the amount you can borrow, it depends on your average monthly income in the past 12 months. On the other hand, if you wish to apply for a two-month salary loan, the amount cannot exceed P24,000.

Considering the repayment terms, a one-month or two-month salary loan can be repaid within two years, in 24 equal monthly installments. The interest rate is 10% per year, and it’s applicable to the entire loan.

If you fail to pay your installments on time, then you will be charged with an additional 1%.Keep in mind that the lending company will charge you a processing fee of 1%.

What Is A Salary Advance Loan?

We all have some cash emergencies we just can’t avoid. Maybe your car broke down, or you need to pay medical expenses, or you only have a couple of days of groceries left. In that case, an advanced salary loan might come as a useful solution until your paycheck arrives.

Filipinos are famous for their money spending habits, and their salary just slips through their fingers. Therefore, many of them resort to salary advance loans which solve their temporary financial troubles. Now, let’s see that these types of loans have to offer what are their terms and conditions.

Why do you need an advance salary loan?

To pay utilities – we are all aware that utilities have fluctuation tendencies. The electricity bill might suddenly increase, or you may miss a couple of payments and end up swatting flies at night, instead of sleeping comfy with an electric fan. Therefore, people apply for salary loans to avoid these uncomfortable situations.

Car repairs – you shouldn’t take an advance salary loan to finance your car payments. However, when unexpected breakdowns emerge, such as engine failure, discharged battery, or flat tire, then the salary loan can come as a suitable solution. Let’s not forget about your registration renewal.

Pay a debt – while salary loan isn’t an ideal alternative to fix your debt issues, sometimes we don’t have another choice. As you probably know, if you don’t pay your debts on time, they can double up and leave you in a big financial mess.

Avoid borrowing money from friends and families – a lot of Pilipinos value their pride and feel embarrassed when they need to ask for money. However, with advanced salary loans, you can avoid uncomfortable situations and fix your money problems.

Time-sensitive purchase – you might find we a well-paid individual, and yet an item you have been eyeing for months just went on sale. This way, you can actually save money by taking a salary advance loan.

What are the requirements?

To apply for a salary loan, you must be a 21-year-old Filipino citizen and currently employed. All applicants should provide a Government-issued ID, the latest salary slip, as well as billing proof.

The application process mostly depends on the lender. However, nowadays, the majority of people choose online lenders due to convenience. Make sure to find a reputable lender, and you will only need a couple of minutes to submit an application form, along with the necessary paperwork. In most cases, the loans are approved within 10 minutes.

On the other hand, if you choose a government institution, then this process might take some time, as the terms and conditions are much stricter.

How much is the interest rate?

Well, if you are lucky enough to find a lender who offers 0% interest, then your loan will be deducted from a salary. But, most of the lenders charge interest rates, and they can be surprisingly high. Often interest can reach 10% of your initial loan, along with the other expenses, such as processing fees.

How Can I Loan My Sss Salary?

If you are self-employed or employed Philippine citizen, and you are a member of the social security system; therefore, you are eligible to apply for an SSS loan. The Social Security System provides plenty of benefits to its members, including various types of loans.

These benefits are available for all members, including 1.3 Filipinos working overseas. Now, you must be wondering why do you need a SSS loan. Well, maybe you have some cash emergency, or you need to cover some medical expenses, or even pay your bill.

For that reason, we are going to guide you through this process and help you apply for an SSS loan.

Check your eligibility

If you are currently employed and contributing to social security, then you are probably eligible to receive this type of loan. However, you must be under 65 at the time of application.

People who want to apply for a one-month salary loan, then they must have at least 36 monthly contributions to social security, while six must be made in the last 12 months. On the other hand, for a loan equivalent to two month’s salary, you must make 72 monthly contributions, six of them in the last 12 months.

Make an account

Go to the SSS registration page and select the option, to begin with, this process. You should fill out an online form to finalize registration.

Next comes the salary loan application. For that, you need an account because you will use it to apply for an SSS loan.

In the application form, you will have to enter your personal, as well as employment information. On top of that, you must state the amount of loan you are applying for, but also how you want to receive it. For people who are employed in companies, your employer will have to fill out one section as well.Submitting your application is the final step in this process. If you are employed, make sure your employee has the account to verify your employment.

Alternatively, go to an SSS branch

Research the nearest branch at the SSS page to find the most convenient locations. Keep in mind that SSS loans are also available for people working overseas. However, make sure to contact the nearest Philippine embassy for additional information.

On the other hand, if you are an OFW member, and you can’t locate an SSS branch in the country where you work and live, then you can authorize a family member in the Philippines to submit an application instead of you.

Receiving the loan

If you meet all the terms and conditions of the SSS loan, then you will be approved immediately. People who live in the Philippines will have funds directly deposited into their bank account. Others can choose either to get a check or credit card via mail.

In most cases, the loan is payable in 24 monthly installments, therefore, make sure to follow specific terms of the loan. Keep in mind that your due date depends on whether you are self-employed or employed.

What Are Salary Loans?

Are you always short on cash as the end of the month approaches? Do you often feel embarrassed to borrow money from family and friends? Well, the salary loan might be something to consider, especially if you need money to fund emergency financial situations.

So, now you must be wondering, what are the salary loans? Basically, they are short-term loans that are offered to borrowers to bypass time until their salary arrives.

In this article, we will try to explain their use, as well as terms and conditions you should fulfill before you can submit an application.

Why do you need a salary loan?

The majority of people use salary loans to fix some emergency expenses until they get paid. It is specially designed for employed people who are trying to make ends meets. Additionally, you can use the salary loan during one-time emergencies.

For example, maybe you have booked airline tickets on the 20th of the month, and you don’t have enough money on your account. What do you do? How do you pay your airplane ticket? If you have a credit card, you can simply swipe your credit card to manage this expense. But, what if your credit card bill is due before salary, or maybe you don’t own a credit card?

Where do you get a salary loan?

When it comes to this type of transaction, there are plenty of online lenders who offer traditional salary loans. However, this is a tricky part, to get affordable loans, you need to find a reputable lender who is willing to provide you with decent interest rates.

After all, the biggest issue with salary loans is that they come with high-interest rates, and if you aren’t careful enough, you may end up in bigger debt than you were.

Who can apply?

Only people who are employed can apply for a salary loan. However, if you are self-employed, you may not be eligible for this type of loan. Pay attention to certain online lenders who do provide salary loans for specific cases. Those are usually startup lending companies that promise loans within a few minutes.

It’s hard to guess whether they can offer decent lending conditions, and you might be required to upload your bank statement, salary slips, ID, and others, to apply for a loan.

What is the interest rate?

Well, interest rates mostly depend on lending companies; however, they shouldn’t top 2.5% per month. Since salary loans are short-term short – term loans, the interest rate shouldn’t be that high. On the other hand, if you fail to meet the payments, then interest might increase.

The processing fee is another thing you should worry about, and it might be as high as 4%, and they are all paid upfront. Also, keep in mind that some lenders calculate interest on a daily basis, which can be a considerable disadvantage.Therefore, make sure you can really meet their terms and conditions before you apply for a salary loan.

What Are Salary Loans With A Fixed Interest Rate?

Loans with fixed interest rates don’t change over time. Therefore, this might be a suitable solution for some people, and getting a fixed interest is always a good option because you always know the costs.When you borrow money, you pay off the loan by paying the interest.

Additionally, they might include additional fees, but interest usually determines how expensive the loan is. For that reason, it’s crucial to understand how interest rate works and whether you can change it.

What is the fixed interest rate?

Nowadays, you borrow two types of loans, the ones that come with fixed interest rates and the ones that feature variable interest. When it comes to a fixed rate, you will pay the same amount over the life of your loan. This is an important thing to consider because the interest rate affects how much your monthly payment will be.

Down payment assistance form and dollar banknotes.

For example, if the interest increases, so will your monthly payments. Eventually, you might end up in a situation where you won’t be able to afford these higher installments. Additionally, the rising interest rate will also increase the price of whatever you bought. In this case, you will spend more money on interest, but you won’t be able to increase the value of the thing you bought.

Safe loans

Fixed interest salary loans are generally more reliable than variable rates. In this case, you know what to expect and how to plan your future. On the other hand, you had probably heard countless stories of people who suffered “payment shock” when the variable interest rates went up.

However, even with a fixed interest rate, you still have to pay for safety because nothing comes for free. Initially, variable rate loans are lower than fixed interest rates; however, this situation can change in a second.

When is the fixed interest rate the wrong choice?

Sometimes a fixed interest rate is not a suitable solution, but you can hardly know this ahead of time. For example, if the rate falls, but you already sign a contract, you won’t have an option to change terms and conditions. In this case, a variable loan might have been a better deal.

Unfortunately, you can never time an interest rate because numerous factors impact its development. Some variable interests keep the same rate and then suddenly drop or increase. However, if you hope to pay off your salary loan, then it makes sense to take a loan with a variable interest rate.

Short-term commitment

Initially, salary loans are designed as a temporary solution to fix your financial emergencies. However, they usually come with a high-interest rate, so it’s worth considering whether you should take such a loan over a variable one.

Therefore, it’s essential to find a reputable lender who will offer you decent terms and conditions. Before you submit your application, make sure to get familiar with the loans they offer, as well as interest rates. Don’t trust companies that don’t have a reputation in this industry. Otherwise, you may end up in bigger debt.

How Much Home Loan Can I Get On My Salary?

Are you ready to make a substantial financial commitment this year? Do you know what it takes to purchase a new house? This is probably the most significant investment in your entire life, so every step should be planned.
The vast majority of people don’t have money to pay for a property upfront, so they take different types of loans to finance their purchase. However, the price of the home, monthly income, and other factors can determine how affordable your loan will be.

Now, let’s see what the requirements for home buyers are and what terms and conditions you must meet before applying for a home loan.

Who can qualify?

The person’s financial capability, as well as stability, are always the top qualification the majority of banks and lending institutions require. But, before you start, make sure to have all the paperwork ready.

For commercial banks:

· Application form
· Government and employment issued IDs
· If married, your spouse must fill out the form
· If single, co-borrower must fill out the separate application form
· You must be at least 21-year-old, but not older than 65

Requirements for self-employed and employed citizens:

· Full-time job
· Employed in the same company for at least two years
· For self-employed citizens, your business must be operating for at least two years

Paperwork requirements for employed:

· Employment certificate
· The latest Income Tax Return
· The proof of remittance for the past six months

Paperwork for self-employed:

· Audited financial statement
· DTI registration
· Income Tax return for the past two years
· The list of at least three major clients with their phone numbers
· Bank statement for the last six months

Home loan terms you should know about

Principal – the amount you wish to borrow on any home loan. If you choose the fixed interest rate, then you can reduce the initial amount.

Down payment – the upfront payment the borrower pays, and it’s usually 30% of the initial loan amount.
Tenure – the life of the loan, for instance, if your mortgage has a tenure of 15 years, then it will take you 15 years to fully pay for your house. Alternatively, you can choose a 20-year tenure as well.

Interest rate – this is the amount the lender charges for a loan. The interest rate is often calculated annually. For example, if you take a 10-year home loan, then your interest rate will be around 5.5%. Additionally, you can choose between fixed and variable interest rates.

The fixed interest rate is more secure than the variable one. Basically, you pay the same amount until your loan expires.

On the other hand, the variable interest rate tends to change over time, so it’s quite challenging to pay your installments ahead.

If you want to lower down the interest, then you should deposit bigger down payment. Also, make sure to find a reputable lender who will offer you decent terms and conditions. In this case, you will avoid numerous issues along the way and ensure the roof over your head.

How To Calculate A Fee For Salary Loans?

Salary loans might come as a great solution when you need some emergency cash. Even though they are quite easy to get, eventually, salary loans can be more expensive than traditional loans.
However, when you compare lenders, it is crucial to understand how fees and interest rate work and what they pay for. Keep in mind that not all lenders charge the same fees; therefore, you should try to calculate fees before you apply for a loan.

We are going to show you the best ways to discover fees related to your loan, and even save some money along the way.

Use online calculators

Online calculators are probably the most popular way to check your loan fees. They are quite easy to use, you just insert loan amount and tenure. However, they aren’t 100% reliable and offer you an approximate estimate.

When using online calculators, don’t go for random tools. You should visit your lender’s online page and use their calculation tool because it will provide you the most accurate estimate. If this tool fails to disclose the interest rate and additional fees, then skip this lender and look for another one.

Visit the lender’s branch

Visiting the lender’s branch might not always be applicable, especially if the lending institution doesn’t have a physical store. Unfortunately, nowadays, a lot of people resort to online lenders, so there isn’t an exact way to thoroughly verify the terms and conditions of the loan unless you submit an application.

However, you can try sending them an email and ask them to provide you information regarding interest rates and additional fees.

On the other hand, government banks and lending institutions have offices that you can visit and get detailed information. But, keep in mind that these types of loans impose stricter regulations, as well as the requirements.

Common fees

In most cases, lenders charge about the Php2,000 processing fee, and this is a common practice for the majority of salary loans. Additionally, you may have to pay documentary stamp tax, which is Php1 for every Php200, but this is only of the loans above Php250,000.

Some people will be submitted to credit life insurance, but not everyone. Based on your application, the bank will determine whether you need credit life insurance or not. Not every lender imposes the same terms and conditions; therefore, make sure to check with them before you actually apply for a loan.

How to apply for a salary loans

As we mentioned before, you can apply for a salary loan using some of the popular online lenders or go to a government institution. In both cases, to be approved, you must be at least 21-year-old, but not older than 65. Complete the application form and provide copies of two valid IDs.

Additionally, submit the lasts payslip and utility billing statement.

It usually takes a couple of hours for your loan to be approved. However, this process might be a bit slower with government banks.

How Much Is Sss Salary Loan Interest In The Philippines?

Employees and self-employed citizens in the Philippines are eligible to receive an SSS salary loan. This can be a beneficial way to fix your financial issues and finally get rid of debt, at least in some way.
However, before you apply for this type of loan, you should understand the essential requirement, as well as terms and conditions. Usually, people are concerned about the interest rate because it determines how affordable your loan is.

Therefore, in this article, we are going to explain a couple of things and help you go through this process as smoothly as possible.


If you wish to apply for an SSS loan, then you must make at least 36 monthly contributions for a one-month loan, and 72 monthly dues for a two-month loan. In both cases, six-monthly contributions must be made in the last six months.

Make sure with your employer that all the contributions are up to date, to avoid unnecessary delays. You need to be at least 21-year-old, but not older than 65. Additionally, you must have a clear record and free of any fraudulent activities committed against SSS.

How can you apply?

First of all, you should fill out the application form and submit the application with the Government and employee issued IDs.

Alternatively, you can apply through the SSS online page. The final loan amount will depend on how many monthly dues you’ve made since opening the account.

However, in most cases, you will be able to get two-month salary loan, which can be payable in 24 monthly installments. The loan will be deducted through your pay. Depending on your case, you might have to provide additional paperwork.

Interest rate

The interest rate usually depends on the lender. But, in most cases, the borrower will be charged an interest rate of 10% on an annual level. In this case, we are talking about fixed interest rates, which you continue to pay until you fully pay off your loan. On top of that, you will be charged with a 1% loan processing fee.

If you miss any payments or you are late with your monthly installments, then you will be charged with a 1% penalty. You can also renew your SSS loan, but you have to pay at 50% of the initial loan. However, in this case, you won’t have to pay additional fees, only the interest rate.

On the other hand, there are lenders who offer variable interest rates, which might be lower than a fixed one. But, in this case, you are risking a lot.

For example, the interest can increase in the following months and leaves you in bigger debt than you initially hoped to repay.

For that reason, make sure to review everything carefully before you make a final decision. After all, you fail to make the right choice; then, you may have to pay a much larger interest until your loan is repaid.

Salary Loan Interest Vs. Salary Loan Fee


When taking a salary loan, there are specific commitments you must fulfill before you get approved. Another issue to worry about is the interest rate and additional fees that aren’t always displayed and often tend to be misleading.
For that reason, people are always skeptical when considering these types of loans, but sometimes you don’t have another choice.

A salary loan is money that a bank or other lending institution borrows to employed people who use it to manage financial emergencies.

But, before you apply for a salary loan, let’s discuss interest rates and other related costs you might be facing along the way.

Interest rate

The interest rate usually determines how affordable your salary loan is. Even though the majority of lenders charge up to 10% annually, some lending institutions might provide you with lower interest rates. Usually, government branches and banks have lower rates, but they impose striker rules.

Additionally, you may choose between fixed and variable rates. With fixed rates, you pay the same amount until your loan expires. Even though they are safer, fixed loans tend to have a higher interest rate than variable ones. After all, in some way, you are paying for that security.

When it comes to variable interest rates, they can change in a matter of days. But, initially, they are lower than fixed ones. One of the biggest disadvantages of a variable interest rate is that you can never plan your monthly expenses. For example, one month, your monthly installment will be lower, while the next one it might be higher. In that case, variable interest rates are highly unpredictable.

So, before you make a final decision, make sure to consider all the factors above, and see whether you can afford the fluctuations in the interest rates.

Loan fees

Every salary loan involves a certain fee and additional charges you will have to pay throughout the life of your loan. Depending on the lender, they might be higher or lower. But, let’s review the standard fees applicable to salary loans.
Disbursement Fee – you will have to pay approximately Php1,800 for each disbursement.

DTS or documentary stamp tax – for every Php200 for the amount, you will be charged with Php1,50. However, this is subjected to changes and depends on different laws and regions.

Closure Handling Fee – you will be charged with 4% upfront.

Returned Check Fee – if any check is returned and bounces back, the borrower will be charged with Php1,500. Usually, the check bounces back due to insufficient funds on borrowers account.

Attorney’s Fees & Other Judicial Expenses – in case of late payment, or if you breach the terms and conditions of the loan, then the lending institution might sue you. In that case, you will have to pay attorney’s, litigation, and judicial fees.

As you can see above, it’s relatively easy to get a salary loan, but it might be a bit challenging to repay it on time, especially with all the fees and interest rates. But, if you are a financially responsible person, you shouldn’t have any issues.