Admin & Legal Officer
Am from a chemical manufacturing company. We have a similar policy in place, wherein we have included the following:
Purpose: clearly defined
Employees eligible: who have completed x no of years of service with organisation
Amount eligible for: Can be based as a percentage of basic or x months basic as such
EMI payable: Interest free or subsidized interest and payable in x no of years/month
The procedure for availing the loan in detail
Form for loan application as annexure
Specify whether the loan will be considered as a perquisite and the calculation for same
General rules in case of separation, pre-closure, cap on the no. of times it can be availed during the tenure of service, etc.
Hope this information is helpful.
10th June 2008 From India, Pune
I am from Construction Industry & we have similar facility, We include undermentioned:
Purpose of Loan: Family Functions/Purchase of house/renovation/emergency
Amount of Loan: Gross salary x 2 (Maximum upto 1 L)
Repayments: 24 Equal EMI, Without any Interest
Eligibility : Confirmed Employees only
We will make an agreement between employee & employer consisting mutual understanding, and take a cheque as surety (must be return after completion of loan)
Hope you it will help you to formulate policy to facilitate your employees through emergency / personal loan
10th June 2008 From India, Gurgaon
You may not insist for any type supporting documents for Personal Loan but i feel they are must for purchase of new vehicle. I think you should check whether the new vehicle is for the usage of employee himself or for his family member because i think that vehicle purchased with Company's finance should be for the usage of employee himself or for his/her family members. I don't know whether you are financing 100% or 70% of vehicle and that too with or without any type of interest on it. If your Company is financing with out interest then it must for you to check the usage of vehicle. It may be possible that employee is already having vehicle and buying new vehicle for the usage of his/her relative/friend from whom he may charge interest to create a new source of income. I think you should be vigilant while financing Personal Loan too. In Personal Loan you may fix a rule that it will be available only after completion of tenure only and not in between where employee closes his loan before stipulated tenure.
I am enclosing here with format of application for vehicle loan for your reference. You should obtain following listed documents before disbursement and after disbursement for vehicle loan.
1. Quotation of vehicle stating ex showroom price and on road price-before disbursement with application.
2. Advance if any paid by employee(if you are financing 100% of ex showroom price then necessary and if you are financing 100% of on road price then not required)-before disbursement with application
3. Copy of Registration Certificate of vehicle with Company's hypothetical charge-Post disbursement.
4. Cover note of insurance of vehicle with Company's hypothetical charge-Post disbursement.
I think you should obtain Hypothetical Agreement of vehicle which should be signed by both-employee and employer over and above your normal documents. Presently a m not having but i will provide you in due course of time.
25th November 2015 From India, Halol
How will you tackle any case of absconding employee?
What is the aim of this Personal loan facility?
How do you intend verifying end use?
Look around and see how other companies which have this policy are handling the matter.
Analyse pros and cons.
25th November 2015 From India, Pune