Hr & Administration
Thanks for the templates. One last thing which i wanted a help on is the Loan Agreement regarding the repayment. I guess the deduction cannot be more the 40% of the salary. can you provide help regarding Loan Re-Payment Agreement.
20th May 2008 From India, Thana
The repayment options are also addressed in the same loan policy.
The repayment can be in Equal Monthly instalments depending upon the employee capability of repaying the loan. As per policy if the repayment options are 6 or 12 or 24 months, the amount should be divided accordingly.
Hope I addressed your concern.
21st May 2008 From India, Hyderabad
I am Raviraj Ghadge, I am working with a small partnership firm. I am very glad to be one of the member where we get all the solutions for our queries and which helps us a lot.
Now I have one doubt that is if I avail a personal loan to one of my staff and also complete the paper work required for the loan and the employee leaves the organization without any intimation. What action can I take OR how will i recover the loan amount? What documents should i take from that staff for loan application? Please help me out for this.
15th May 2010 From India, Mumbai
Your intention to provide interest free personal loans to employees. But please remember that you need to include the interest on the loan amount as declared by SBI as taxable income and deduct TDS appropriately.
Trust the matter is clear
14th December 2010 From India, Madras
We had faced problems while employees availed personal loans from financial institutions.
While the financial institutions approached us for discussing their proposal we made it clear that the company will only recover the loan amount to the extent the employee earns salary. However, if for any reason the employee does not earn salary, the company will not make upfront payment for the loan amount and recover it later from the employee.
Likewise if the employee leaves the organisation the company will only send an intimation to this effect to the financial institution and the company will not liable for recovering the balance loan amount from the employees full and final settlement. Intially these institutions refused to accept our conditions but we were firm and finally a letter to this effect was signed by me and handed over to the financial institution and the duplicate was acknowledged by them. Subsequently when the salary fell short of the EMI or when the employee left we merely wrote a letter to the financial institution for recovering the amount.
As regards Maheswari's query you cannot recover any dues from the Gratuity amount and dues to the extent of salary, leave encashment, LTA and Medical reimbursement expenses alone can be recovered.
Never entertain personal loans from company as this will be difficult for you defend your case when the employee leaves the organisation. It is also advisable not to recommend any personal loan amount employeewise statement to any financial institution as this will be a document binding on the company.
15th December 2010 From India, Madras