GSIS cuts interest rate on emergency loans

MANILA, Philippines – The Government Service Insurance System (GSIS) has reduced the interest rate on its emergency loans.

GSIS president and general manager Robert Vergara said the interest rate on the loan is now down to six percent from eight percent previously.

Furthermore, GSIS would no longer charge a one percent service fee for the loan, Vergara said. “This is part of the current effort of the Board and Management to make our policies and programs more responsive to our members especially at a time they need it most,” Vergara said.

According to its existing policies on emergency loans, each eligible member can borrow P20,000.

The amount is payable in three years and in equal monthly installments.

The start of the monthly payments is three months after the loan drawdown.

For members with outstanding emergency loans, they shall be allowed to renew the loan if they have paid at least 12 monthly installments.

“Members who can avail of the loan include those who are bonafide employees of the agency located in the declared calamity area or is a resident of the declared calamity area; are in active service and not on leave of absence without pay; have no pending criminal or administrative charges; have no arrearages in the payment of mandatory social insurance contributions; and have no loan that has been declared in default. The agency of the member-applicant must not also be suspended because of non-payment and non-remittance of premiums and loans,” GSIS said.

So far, GSIS has granted P1.68 billion in emergency loans to qualified members from January to August this year. The amount helped assist members who suffered from the recent spate of calamities, Vergara said.

For the emergency loans with lower interest rates, Vergara said eligible members can avail of this from Oct. 5 to Nov. 3, 2011 only.