Need Help Creating an Employee Loan Policy: Can You Share a Draft and Guidance?

Dear All,

Could anyone please forward me the draft for the employee loan policy and guide me on how to proceed to make this facility available for my company employees?

Regards,
RC

Dear Friend,

The loan policies differ from company to company, so it is important to follow the guidelines of the specific policy. Here are some key points to consider:

1. Name of the Loan (e.g., Kitty Loan, Marriage Loan, etc.)
2. Entitlement of the employees (who can avail the policy)
3. The limitation of the policy amounts (for each particular policy)
4. The period of repayment
5. Approval authority (sanctioned by HOD, HR dept, GM, etc.)

I hope the above information helps you understand the loan policies better.

Ranju

Hi,

Example: Repayment of a loan can be a monthly installment of Rs 500 out of Rs 4000.

Example: Repayment of an advance can be made in one installment in a particular month.

Regards

Good to know the details on the employee loan facility.

I request you to let me know whether we should offer a loan facility or not, as the market is in bad shape. I have learned that many companies have withdrawn their loan policies, as per ISO 9000:2008 standards, which state that the employer or proprietor may not be able to recover the loan amount. Additionally, according to government rules and regulations, a bond may seem like an illegal entity.

Could you please provide clarification on this matter?

Regards,
Niranjan

Dear,

I agree with Niranjan, but if you want to draft a policy on loans, here are a few points to consider:

1. Why not change it and name it the "Advance Salary Policy"?
2. One person can apply for the same but up to double his/her monthly gross salary.
3. Repayment should be within a year with equal monthly installments deducted from the salary.
4. Before applying, the individual needs to provide a specific reason, and there should be no outstanding dues.
5. The HR Manager will approve the advance loan with the consent of the department head of the same employee, and the accounting department will issue the cheque.

This policy can benefit you and the company, especially during the current economic climate with the looming recession. It can help minimize operating risks and allow you to fulfill your promises.

Regards,
Vipin