How Should I Respond to an Employee's Loan Request When Our Company Can't Provide It?

One of our employees is asking for a loan for his marriage, but at present, our company is not providing any loans to employees. Our company's funds are based on an overdraft, so it is difficult to provide a loan to an employee.

Request for Assistance in Drafting a Reply

Please help me prepare the reply message to the employee.

Thanks in advance.

Regards,
Rose Mary

There is no legal obligation for a marriage loan given by the company, but to maintain a friendly and cooperative environment, simply go to your boss and ask. If your boss agrees, then you can proceed further.

Considerations Before Approaching Your Boss

Remember, before going to your boss, ensure you consider the behavior of the employee, the length of service, total dues (like Earned Leave, LTA, Medical, etc.), and how much is required to pay back the amount.

Thanks,

Sandeep Tomar

There is no rule that an employer should provide a loan to an employee. As a special case, if you believe that the concerned employee is in need, then ask your Supreme Authority to sanction a loan subject to his/her drawing power. This is a marriage loan and is totally unsecured. I hope the amount is not exorbitant. Otherwise, you can inform your bankers to assist him and grant him a personal loan. As security, provide the bankers with a Salary Attachment letter. Deduct the EMI amount from his salary and pay the monthly installment. See if your bankers will help you or not.

Regards,
Ramakant