The approved loan shall at all times, during its term, be automatically covered by a Loan Protection Fund (LPF), for which the corresponding amount of P1.00 for every thousand per month shall be deducted from the loan proceeds. Should the borrower die or become permanently and totally disabled, while this loan is still outstanding, the theoretical balance of the loan (the balance of the loan if the borrower consistently pays the weekly/bi-weekly/monthly installment on or before the due dates) as of the date of death or disability of the borrower shall, by virtue of the insurance coverage, be deemed paid. In case there are arrearages on the loan, the difference between the actual balance and the theoretical balance shall be deducted from whatever benefits that may be due the decreased or disabled borrower. The insurance coverage is automatically terminated while the borrower pays the loan in full, or renews the loan, or upon expiration of the term of the loan, whichever comes first.
8. Maturity of the Loan
This loan automatically matures upon retirement or separation, permanent disability of death of the borrower; (a) the borrower’s outstanding loan shall become due and demandable; (b) the borrower hereby agrees that all his salaries, bonuses, separation/gratuity pay, retirement benefits and all other benefits due to him his/her employer shall be withheld by his/her employer and remitted to SBMA-EWMPC to settle the borrower’s outstanding loan.
9. Renewal of Loan
The borrower must have paid at least fifty percent (50%) of the original loan to qualify for a new loan.
10. Loan Pre-termination
The borrower may pre-terminate the loan during its term subject to the full payment of outstanding balance of the principal amount and other charges, if any.
11. Loan Cancellation
Once the loan is approved and the loan proceeds have been released through check, the borrower has no more option to cancel the loan but only to pre-terminate it by paying the full amount of the outstanding balance including accrued interest, if any, without any right to demand for reimbursement of service fee and such other fees that might have been collected under such loan.
12. Surcharges and Penalties
Surcharge of one percent (1%) shall be imposed on every unpaid installment on the loan, or any portion thereof, for every month of delay until the same is fully paid. A penalty of two percent (2%) per month shall be charged for past due amortizations.
13. Co-Maker
In the event the Co-maker is terminated/separated from the SBMA, the member/borrower shall submit to the SBMA-EWMPC a qualified and acceptable replacement of the Co-maker for the loan as determined by the SBMA-EWMPC within ten (10) days from the termination/separation of the Co-maker from the SBMA. Failure to do so shall constitute an event of default hereunder.
14. Events of Default
The following shall be considered events of default:
a. Failure of the borrower to pay three (3) monthly amortizations, which may not necessarily be consecutive.
b. Material misrepresentation in this loan application committed by the borrower or Authorized Endorsing Official of the employer of the borrower.
c. Failure of the borrower to comply, perform or observe any other provision, term, condition under this loan agreement.
d. Dismissal from SBMA with forfeiture of benefits.
15. Consequences of Default
If an event of Default occurs and continues to occur, the SBMA-EWMPC may, at its option, declare the entire principal amount of this loan including all interest and other charges, to be due and payable without need of demand or further notice, all of which the borrower expressly waives. Further, all loan privileges of the borrower shall also be suspended, except when the proceeds of the new loan shall be used to settle the arrearages thereon.
16. Attorney’s Fees
Should the SBMA-EWMPC be compelled to refer the loan or any portion thereof to an Attorney-at-Law for collection or to enforce any right hereunder against the borrower or avail of any remedy under the law or this agreement, the borrower shall pay an amount equivalent to twenty-five (25%) percent of all amounts outstanding and unpaid as attorney’s fees and litigation expenses.
17. Venue
Any legal action, suit, or proceeding arising out or relating to this agreement, shall be brought or instituted in the appropriate courts in the City of Olongapo to the exclusion of all other courts.
18. Transfer/Change of Office
If the member/borrower transferred or is seconded to any government office/agency, he/she shall pay directly to the Cooperative.
19. Notices
All notices required under this agreement or for its enforcement shall be sent to the office address or postal/mailing address indicated in the personal data portion of this loan application or to such other addresses as may be indicated by the member borrower. The notices sent to any of such addresses shall be valid and sufficient notice to the member/borrower for all legal intents and purposes.
