Consumption Loan

Consumption Loan Types

1. Bridge Financing
2. Business Loan
3. Calamity Loan
4. Car Down Payment/Car Repair Loan
5. Car, Fire, Life Insurance Loan
6. Club Membership Loan
7. Credit Card Balance Transfer Loan
8. Educational Loan
9. Health and Fitness/Health Care Insurance Loan
10. Home Down Payment Loan
11. Home Repair Loan
12. Loan vs. Capital Contribution
13. Loan vs. Special Savings Deposit
14. Medical Assistance Loan
15. Motorcycle Loan
16. Pre-Need/Memorial Loan
17. Promo Loan
18. Short-term Loans

Implementing Rules and Regulations

1. Eligibility
   • All members of the association having the necessary qualifications to obtain a loan shall be eligible provided that he agrees to fulfill all loan requirements and execute all supporting papers and/or documents to the satisfaction of the loan.
2. Loan Limits
   1. The association may grant loans not exceeding the amount deposited and/or contributed by the member-borrower plus his twelve (12) months salary.
   2. Maximum loanable amount shall be:
      1. Withdrawable capital contribution, plus
      2. Salary as follows:
         

         Company	Years in Service	Loanable Amount
         PSPC	Less than 3 years 3 years and above	3 months 12 months
         SPEX	Less than 3 years 3 years and above	3 months 12 months
         SESLA	Less than 3 years 3 years and above	3 months 12 months
         SBSC	Less than 3 years 3 years and above	2 months or 50,000 whichever is lower 12 months

      3. No loan shall be allowed in excess of any amount for which the corresponding monthly amortization (principal plus interest), when added to other deductions from the borrower’s pay, will produce deductions totaling more than 60% of the borrower’s pay (basic monthly salary).
      4. However, in cases where the recurring deductions exceed 60%, additional sources of income and other covenants shall be required to satisfy the loan subject to appropriate credit approval.
      5. For retired members, loan should be covered by his total withdrawable capital contribution and/or hold out time deposit.
3. Repayment
   1. No consumption loan shall have a maturity date of more than three (3) years.
   2. Repayment of principal and interest on the loan will be made in equal monthly installments through payroll deduction for members / borrowers under payroll,and post-dated checks for non-payroll members / borrowers.
   3. The borrower may increase amortization payment, if he so chooses, to hasten the repayment period.
   4. Upon prior notice to SESLA, the Borrower may preterminate the outstanding principal
      balance of the loan, together with the accrued interest from the date of the last amortization up to pretermination date and the pretermination fee shall be one (1%) percent of the unpaid principal or PHp500.00 whichever is higher.
4. Subsequent Loan
   1. A member borrower may be entitled to subsequent loan provided that all outstanding loans shall not exceed member’s maximum loanable amount and that the recomputedtotal deduction inclusive of the subsequent loan being availed shall not exceed the 60% maximum monthly deduction threshold.
   2. Restructuring and early settlement of loan maybe granted and subject to new approval process, with or without proceeds.
5. Interest and Handling/Service Fees
   1. Loans granted shall bear an interest at the rates set by the Board of Directors.
   2. An amount will be charged for handling and service fee.
6. Co-makers
   • By way of security, borrowers are required to obtain co-makers to guarantee repayment of the loan in a joint and several capacities with him, based on the borrower’s length of employment tenure. (Appendix B)
   • A co-maker leaving the company should be immediately replaced as a co-maker by all principal borrowers, else such leaver will not be cleared of his financial obligations.
   • In the event that a co-maker is not replaced, the principal borrower is obliged to adjust the amortization schedule to maintain the level of contingent risk exposure of the remaining co-maker/s.
7. Insurance Coverage
   1. All member borrowers with outstanding loans over P50,000 must subscribe to a mandatory annual life insurance equivalent to the amount of loan balance at the beginning of each year in favor of SESLA as the primary beneficiary.
   2. Member borrowers with loan balance less than P50,000 may at their option be also covered with a life insurance.
   3. SESLA shall arrange for accreditation of insurance companies from whom the insurance policies maybe procured at the most optimum term.
   4. As a free of charge service, SESLA with the formal consent of member borrower shall facilitate the individual enrolment and premium payment arrangement of the insurance coverage.
8. On Leaving the Company Service
   1. In case of separation from the service either by resignation, discharge, death, or for any other cause, the full balance of the loan shall become immediately due and payable.
   2. Insurance proceeds with SESLA as the assigned primary beneficiary shall be applied to the outstanding balance of the loan, excess if any shall be paid to the designee beneficiary/ies else to the legal heirs;
   3. The borrower or his heirs should, pay the outstanding balance; otherwise, the Association will commence deductions from the co-makers on record per loan documents.
9. Default in Payment
   • In case of default, the following courses of action will be undertaken:
     • 1 month default – demand letter
     • 2 months default – 2nd demand letter cc: all co-makers
     • 3 months default – 3rd demand letter cc: all co-makers
     • 4 months default – collection from co-makers