The Government Service Insurance System (GSIS) has introduced a loan buyout program designed to help government employees consolidate their debts at interest rates as low as 6%.
The initiative, called MPL Max, is aimed at alleviating the financial burden on members by offering them a path to financial stability and recovery.
GSIS president and general manager Wick Veloso highlighted the pension fund’s commitment to protecting its members from high lending rates. “Through the MPL Max, we are throwing a lifeline to our members who are weighed down by debt,” Veloso said. “This goes beyond consolidating loans – we are helping our members rebuild their lives by creating a clear path to financial recovery and stability.”
The program is structured to begin with a memorandum of agreement between GSIS and the employee’s respective government agency.
Once this agreement is finalized, employees are able to combine all of their loans into one, benefiting from a reduced interest rate and extended payment terms.
The program offers borrowers the opportunity to borrow up to 19 times their monthly salary, or a maximum of P5 million, whichever is lower, with repayment terms that can extend up to 10 years.
GSIS has waived surcharges on existing GSIS loans and all service fees. Members will also receive loan insurance coverage at no additional cost and can pre-terminate their loans without incurring penalties.
To qualify for the program, GSIS members need to have made at least one month of premium contributions within the past six months, have no existing multi-purpose loans or defaulted GSIS Financial Assistance Loans, and be free of any administrative or criminal cases. Members must also have a sufficient net take-home pay as required by the General Appropriations Act.
The application process requires members to submit an application form, borrower loan agreement, and loan voucher or other certified documents showing existing loans.
They will also need to provide a statement of account from their lending institutions, confirming the correctness of their outstanding debts, along with an ID copy of the lending institution’s authorized representative who will claim the check from GSIS, as well as their latest pay slip. All documents should be submitted in person after scheduling an appointment through the GSIS Touch facility.
Once the loan buyout is approved, GSIS will directly pay off the member’s loans to the respective lending institutions. Any remaining balance after the loan settlements will be credited to the member’s GSIS eCard or regular ATM account. Monthly repayments will be automatically deducted from the member’s salary.
