Question & AnswerQ&A (GSIS Resolution NO. 129)
The addendum clarifies that interest shall be charged on the first three months following the loan availment and that the accrued interest for this period shall be spread over the life of the loan.
The Senior Vice-President, Corporate Services Group and Corporate Planning Office proposed the addendum in a memorandum dated 3 July 2012.
The addendum complies with Republic Act No. 3765, also known as the Truth in Lending Act, which requires the disclosure of finance charges in connection with extensions of credit.
Republic Act No. 3765 mandates that the interest and penalties charged on loans must be fully disclosed to members availing of the loan, promoting transparency.
The interest accrued during the first three months after the loan grant is charged initially but is spread over the life of the loan repayment term.
The addendum was approved and confirmed on 16 August 2012.
No, the provisions of PPG No. 201-09 dated 17 September 2009 shall continue to have full force and effect alongside the addendum.
The Corporate Governance Committee endorsed the addendum during its meeting on 2 August 2012.
It is referred to as the Conso-Loan Plus Program.
Spreading the accrued interest over the life of the loan aligns with GSIS's vision of transparency and ensures that members are not burdened with immediate interest payments after loan availment.