3. Repayment

a. No loan shall have a maturity date of more than five years.

b. 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.

c. The borrower may increase amortization payment, if he so chooses, to hasten the repayment period.

d. The borrower may liquidate without penalty, at any time, his outstanding loan balance.

4. Subsequent Loan

a. Every member is entitled to subsequent loan provided that all outstanding loans shall not exceed his maximum loanable amount.

b. Restructuring and early settlement of loan shall be granted with or without proceeds.

5. Interest

a. Loans granted shall bear an interest at the rates set by the Board of Directors based on the following interest rates.



Consumption Loan	13% Diminishing Balance Method
* For purposes of purchasing a Car, same term as chattel loan will be applied. However, the rule on co-makers will still be applied.
Promo Loans	10% Diminishing Balance Method
* Promo Loans with rebate from tie-ups:
Terms of Loan	Interest Rate
6 months	6% Diminishing Balance Method
12 months	7% Diminishing Balance Method
24 months	8% Diminishing Balance Method
Club Membership	11% Diminishing Balance Method
Memorial Plan	9% Diminishing Balance Method

b. An amount equivalent to 2% of the principal will be charged for handling and service fee for Consumption Loans and 1% for Promo Loans.

By way of security, borrowers are required to obtain co-makers to guarantee repayment of the loan in a joint and several capacity with him, based on the following:

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

1. Eligibility

All members of the association shall be eligible provided that:

a. He is at least FIVE (5) years in service as regular employee of Shell Companies in the Philippines.

b. He agrees to fulfill all loan requirements and execute all supporting papers and/or documents to the satisfaction of the chattel mortgage.

c. For married couples, both can apply for a single loan on the condition that both loans are in respect of the same vehicle.

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2. Loan Limits


a. The association may grant loans not exceeding the amount deposited and/or contributed by the member-borrower plus his twelve (12) months salary or retirement pension from his employment, or up to seventy percent (70%) of the fair market value of any property acceptable as collateral on first mortgage that he may put up by way of security: Provided that direct indebtedness to an NSSLA of any member-borrower for money borrowed with the exception of money borrowed against obligations of the BSP or of the Philippine Government, or borrowed with the full guarantee of the Philippine Government in the payment of principal and interest, shall exceed fifteen percent of the unimpaired capital and surplus of the NSSLA.

b. Maximum loanable amount shall be ONE MILLION PESOS ONLY (P1,000,000.00). For SSSA and SSSC, maximum of SEVEN HUNDRED THOUSAND ONLY (P700,000.00).

c. The loan shall not cover incidental expenses, such as documentation fees and others. All these expenses shall be for the borrower's personal account.

d. 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 plus the transport expense reimbursement applicable to him). However, in cases where the recurring deductions exceed 60%, additional sources of income shall be required to satisfy the loan.

e. For retired members, loan should be covered by his total capital contribution.

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3. Condition of Vehicle

Loans shall be allowed for the purchase of either new cars or second-hand cars. In respect of second-hand cars, the Association must be fully satisfied that the condition of the vehicle is such that it will be clearly sufficient to cover the life of the Chattel Mortgage. A loan shall be allowed for the purchase of a car not more than THREE (3) years old. In all such cases, the employee must also show and warrant that all taxes, fees, and duties on the vehicle have all been paid and that there are no obstacles to the transfer of the car ownership to his name.

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4. Repayment


a. Loan is payable up to maximum of FIVE (5) years.

b. 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.

c. For non-payroll members, his capital contribution shall cover the total maturity value of loan on the time the loan was granted. In case of default in payment, amount shall be deducted from his capital contribution.

d. The borrower may liquidate without penalty, at any time, his outstanding loan balance.

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5. Subsequent Loan


a. New loans/second time loans shall be granted only after his original obligations are settled.

b. No restructuring of loans will be granted under the current scheme/interest rate. Loans granted under the old scheme/interest rate can be restructured once without proceeds.

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6. Interest


a. Loans granted under Chattel Mortgage will bear an interest rate of TEN PERCENT (10%) diminishing balance method per annum, until further advice.

b. An amount equivalent to 1% of the principal amount will be charged for handling and service fee. For change collateral, 1% HSF shall be charged based on the outstanding loan balance.

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7. Mortgage


a. As security for the loan, the borrower shall execute a 1) Deed of Assignment of his Retirement Pay or Capital Contribution for retirees and 2) Loan agreement with Chattel Mortgage in favor of the Association. The mortgage registration shall be arranged by the borrower and all cost incurred shall be for the borrower's account. All car documents required from the borrower must be submitted and duly accomplished before release of the loan.

This mortgage shall constitute a lien on the vehicle and shall be cancelled only upon full payment of the loan. No other mortgage shall be executed over the vehicle in favor of the second party. In case of default, the mortgage shall be foreclosed by SESLA and the proceeds applied to the outstanding loan balance.

b. Original copy of the Official Receipt and Certificate of Registration and all other documents duly accomplished must be submitted before release of the loan.

c. In case of default, the Association has the right to sell the property and the proceeds shall be applied to the outstanding loan balance.

d. Change of collateral maybe accepted as long as there is no change in monthly amortization and the offered collateral must have a market value equal to or higher than the outstanding balance of the loan.

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8. Insurance

The borrower shall be obliged to insure the vehicle equivalent to principal amount of loan against:

a. Bodily injury
b. Property Damage
c. Damage to Vehicle
d. Theft

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9. On Leaving the Company Service


a. 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.

b. The borrower or his heirs should, therefore, pay the outstanding balance to the Association; otherwise, the unit shall be subject to sale.

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10. Default in Payment

In case of default, the following procedures shall be undertaken:



1 month default	demand letter
2 months default	2nd demand letter
3 months default	3rd demand letter
4 months default	sale of motor vehicle and execute the corresponding deed of sale and such other documents necessary to transfer ownership over the aforesaid motor vehicle in favor of any buyer.

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11. Fund

Application shall be on a first-come-first-served basis, limited by the amount available for any given time.

• Capacity to pay based on borrower's pay slip, spouse income
• Basic Documents

2. Loan Processing / Preparation of Check

3. Approval of 3 directors.

4. Preparation of Loan Agreement, Assignment of Retirement Pay and SPA to be signed by the borrower.

5. Registration of Loan Agreement and Annotation of CR to be accomplished by the borrower.

6. Verify submitted original documents and signatures on LTO OR and CR

7. Release of Check.

D. Real Estate Mortgage Loan

1. Eligibility
All members of the association shall be eligible provided that:

a. He is at least THREE (3) years in service as regular employee of Shell Companies in the Philippines.

b. He agrees to fulfill all loan requirements and execute all supporting papers and/or documents to the satisfaction of the REM.

c. For married couples, both can apply for a single loan on the condition that both loans are in respect of the same vehicle.
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2. Condition

• New loans/second time loans shall be granted only after his original obligations are settled.
• No restructuring of loans will be granted under the present scheme/interest rate. Loans granted under the old scheme/interest rate can be restructured once with or without proceeds.
• The loan shall not cover incidental expenses, such as appraisal fees, documentation and documentary stamps, registration fees, etc. All these expenses shall be for the borrower's personal account.
• The borrower shall not, without the written consent of the Association sell, encumber, or further mortgage the property used as collateral to secure his obligation under the REM.
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3. Loanable Amount and Other Limits

a. The association may grant loans not exceeding the amount deposited and/or contributed by the member-borrower plus his twelve (12) months salary or retirement pension from his employment, or up to seventy percent (70%) of the fair market value of any property acceptable as collateral on first mortgage that he may put up by way of security: Provided that direct indebtedness to an NSSLA of any member-borrower for money borrowed with the exception of money borrowed against obligations of the BSP or of the Philippine Government, or borrowed with the full guarantee of the Philippine Government in the payment of principal and interest, shall exceed fifteen percent of the unimpaired capital and surplus of the NSSLA.

For example: Where a member's 12months salary is equivalent to P1Mn, a deposit with SESLA of P500T, and land with FMV of P2Mn, then he/she can avail of two (2) loans:

1. A consumption loan up to P1.5M (summation of 12 months salary of P1M + deposit of P500T)

AND

2. A loan of P1.4Mn backed by REM on the land worth P2M (P2M x 70%)

b. Maximum Loanable amount shall be equivalent to 70% of the appraised value of property used as collateral.

c. 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 plus the transport expense reimbursement applicable to him). However, in cases where the recurring deductions exceed 60%, additional sources of income shall be required to satisfy the loan.

d. For properties outside Metro Manila, loanable amount shall be 50% of the appraised value of the property used as collateral.

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4. Terms of Payment

• Loans are payable up to maximum of TEN (10) years but in no case will the period exceed the difference between age 60 and the applicant’s age at the time the application for loan is approved.
  
  
• Repayment of principal and interest on the loan will be made in equal monthly installments through payroll deduction.
  
  
• For non-payroll borrowers, principal and interest on the loan will be made in equal monthly installments through Post Dated Checks.
  
  
• The borrower may liquidate without penalty, at any time, his outstanding loan balance.
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5. Interest


Loans granted under REM shall bear an interest rate based on the following amount of loan:



Amount of Loan	Interest Rate
P 1M to P 5M	9% DBM
P 6M to P10M	8% DBM
P 11M and above	7% DBM

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6. Processing Fee


Loans under REM will be charged a handling fee of 1% of the principal amount for borrowers under payroll and 2% for non-payroll members due to higher risk involved.

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7. Collateral and Mortgage Requirements

1. The property to be offered as collateral will be the residential house and lot or condominium unit for which the housing assistance was secured on a first mortgage in favor of the Association.  However, members who wish to avail of loan using collateral that is different from the purpose of loan shall be treated on a case to case basis.
   
   
2. Appraisal report of collateral duly authorized by the association.
   
   
3. In the event that the borrower who has an outstanding loan balance under the REM is separated from the service of SCiP or terminated his membership from the Association either by resignation, discharge, death or for any other cause, his loan balance together with accrued interest thereon shall become immediately due and payable.
   
   
4. By way of additional security for the repayment of a loan under the REM, the applicant/borrower will be required to assign in favor of the Association all rights to such benefits he might be entitled to by way of severance, death and other payments due him from the Association and SCiP.
   
   
5. In the event of violation of any provision of REM Implementing Rules and Regulations and/or provisions of attendant contracts, the Association reserves the right to accelerate payment of all outstanding amortization and demand payment together with accrued interest.
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8. Insurance


The property offered as collateral must be covered by insurance against fire with an insurance firm acceptable to the Association. Such insurance coverage shall be endorsed to the Association as its interest may appear. The amount of insurance must be sufficient to cover the loan amount and subsequently, the outstanding balance at the time of each renewal.

The applicant shall furthermore secure a Mortgage Redemption Insurance (MRI) in such amount to cover his outstanding loan with the Association as principal beneficiary.

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9. Types of Loan

1. To finance the outright purchase of a residential house and lot.
2. To finance the construction of a new residential house on a lot owned by the member/borrower.
3. For re-financing of an existing residential housing loan obligation with assumption of mortgage.
4. To finance major repairs, remodeling, extension, and/or improvements on the residential house, provided that its residential character is not altered.
5. To finance the purchase of lot and construction of a residential unit.
6. Redemption of a foreclosed property.
7. To finance the outright purchase of a condominium unit.
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10. Document Requirements

Any qualified member who wishes to avail himself of a loan under REM shall submit the following:

a. Basic documents required to support the loan:


1. For all types of loans, 1 copy of Loan Application Form.
2. For all types of loans, 1 copy of Income Tax Return for the last four (4) years (necessary only for Retirees/Outside Payroll)
3. For all types of loans, 1 photocopy of the owner's Transfer Certificate of Title (TCT) including entries of encumbrance, if any.
4. For all types of loans, 1 photocopy of the latest tax declaration covering the lot/improvements and Realty Tax Receipt for the current year.
5. For loan type numbers 2, 3, 5 & 6, 1 copy of Statement of Account if lot is not fully paid for or for re-financing/foreclosed property.
6. For loan type numbers 1, 2, 5 & 6, 1 copy of Deed of Absolute Sale and/or Contract of Sale for purchase of residential unit or unpaid lot.
7. For all types of loans, 1 copy of Lot plan and vicinity map signed/sealed by registered engineer (scale 1:200).
8. For loan type numbers 2, 3 & 5, 1 copy of building plans and general working drawings (signed/sealed by an Architect or Civil Engr.)
9. For loan type numbers 2, 3 & 5, 1 copy of specification of materials and construction (signed/sealed by an Architect or Civil Engr.)
10. For loan type numbers 2, 3 & 5, 1 copy of bills of materials and cost of labor (signed/sealed by an Architect or Civil Engr.)
11. For loan type numbers 1, 4, 5 & 6, 1 copy of picture of existing house and all portions to be repaired/remodeled for major repairs.
12. For loan type numbers 1, 2 & 3, 1 copy of certificate of house and lot acceptance.
    
    
b. Final documents to be submitted:


1. For all types of loans, 2 copies of Annotated Loan Agreement with Real Estate Mortgage. (To be prepared by SESLA).
2. For all types of loans, 2 copies of original and photocopy of annotated Owner's duplicate Transfer Certificate of Title.
3. For all types of loans, 1 photocopy of Duplicate of Declaration of Real Property.

 

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11. Procedure in Processing of Loan under Real Estate Mortgage

1. Evaluation
   
   
• Basic Documents
• Appraisal Report of collateral
• Certified true copy of TCT
• Site ocular inspection
• Capacity to pay based on borrower's pay slip, spouse income
  
  
2. Loan Processing / Preparation of Check
   
   
3. Approval of at least 4 directors.
   
   
4. Preparation of Loan Agreement, Assignment of retirement pay and SPA to be signed by the borrower with marital consent, if applicable. For Loan Type number 2 (To finance the construction of a new residential house on a lot owned by the member/borrower), Agreement from member that in the event 70% of the appraised value of his property (after construction) would not be sufficient to cover the amount of loan released, he would immediately settle/return the difference.
   
   
5. Registration of Loan Agreement and Annotation of TCT to be accomplished by the borrower. On the other hand, additional loan need not require annotation of TCT.
   
   
6. Verify Signature of Register of Deeds - TCT vs. Annotation 
   
   
7. Release of Check
   
   
• In cases where the original TCT or CCT is not yet available or payment is required to transfer the title to the borrower’s name, the check maybe released provided that any of the following documents is submitted:
  
  
a. Letter of Undertaking
b. Letter of Unit Turnover



• For Loan Type number 2, (To finance the construction of a new residential house on a lot owned by the member/borrower) releases shall be subject to ocular inspection by SESLA representative of the work completed as follows:
  
  

  Initial release	70% of Appraised value of Lot (collateral)
  2nd release	35% completion
  3rd release	75% completion
  4th release	100% completion
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12. Default in Payment


In case of default, the following procedures shall be undertaken:



1 month default	demand letter
2 months default	2nd demand letter
3 months default	3rd demand letter
4 months default	notice of extra judicial foreclosure

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13. On Leaving the Company Service

a. 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.

b. The borrower or his heirs should, therefore, pay the outstanding balance to the Association; otherwise, the property shall be subject to sale.




• Services
  
  
  a. Automatic Monthly Deduction from payroll
  
  
  b. Deposit Facility