Resigning? Do Not Apply for SSS Salary Loan Yet

If you're planning to resign from your company, do not apply for SSS salary loan yet.
Wait till you have moved to your new employer before filing your loan application, or wait till you have received your last pay from your former company and then file your loan as Voluntary.

Because when you resign and you have an outstanding SSS salary loan, your employer will deduct your SSS loan balance in full from your last salary and benefits, and you need to wait for one year from date of loan check before you can renew your loan.

Why would your employer do that?  Because employers are mandated by SSS law to deduct your SSS salary loan balance in full from your last pay.
Here is the relevant SSS policy as written at the back of the SSS salary loan application form:

  2. The employer shall deduct the total balance of the loan from any benefits due to the employee and shall remit the same in full to the SSS, in case the member-borrower is separated voluntarily (e.g. retirement or resignation) or involuntarily (e.g. termination of employment or cessation of operations of the company).

Note that even if you did not resign from the company, and instead you were terminated or you were retrenched or the company closed, the company is still mandated to deduct in full your SSS loan balance from your last pay.

In case this thing happened -- you got your loan and your employer deducted in full your loan balance -- ask your employer for a copy of the ML1 receipt and collection list where your loan payments appear. Check from time to time your online SSS account and see if your SSS loan payment has been posted.

There have been several people who have commented in our blogs and in other blogs that their loan payments were never remitted by their previous employers, and they found out about it only after many years have passed.


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  2. Good day! I will be separated from the company involuntarily due to business issues and asked our HR regarding my loan balance if I can pay it voluntarily instead of deducting it from my last pay. I was advised to write a letter stating that I will be voluntarily pay my loan balance monthly when I will process my clearance.

    I'm trying to check the internet regarding this situation but all the blogs and sites are stating that the loan balance will be deducted.

    I hope I can get a confirmation if writing the letter of voluntarily paying the loan balance is possible.

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