Dear All,
I am working in representative office of an UK company. My general manager is planning to introduce a loan program for the short-term financing needs of our employees. Can I be advised the watchouts, i.e., the maximum loan size, the interest rate, the repayment terms, any tax implications to employers/employees...
It will be great if I can be given the relevant rules for my self-studies.
Best regards,
8th April 2009 From Hong Kong, Kowloon
In our company, we call this loan as emergency loan for in order to avail it the case must be an emergency type. For example, it must be due to calamity, hospitalization not covered by our health insurance, and education. Interest rate differs per rank since the takehome pay of supervisors is different to those of team member/rank and file employees. Our interest rate is what they call as diminishing and loan can be payed for a maximum of 6 mos.
Hope i've helped somehow.
8th April 2009 From Philippines
Hello Carmie,
First, I would like to thanks for your sharing. Shall the loans be restricted to the said usages such as medical and education? It is hard to validate how employees use the money as there is no credit assessment conducted for the applicants/employees. We are providing interest free revolving loans. The max loan is capped at 6 month of the basic salary. Do you see any compliance issues in terms of the labor law or other relevant legitimate requirements?
Best Regards,
12th April 2009 From Hong Kong, Kowloon
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