Our company is planning to introduce a housing loan policy. Can someone give me the draft housing loan policy, agreement, and the procedure to be followed, documents to be collected from the employee, etc.
From India, Madras
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Hi there,

I worked in an organization that offered interest-free housing loans, so here is what you need to do:

- You need to conduct market research (check with the banks) to determine the percentage of salaries against which the housing loans are provided.
- Try to align your funding with your salary structure to establish the minimum and maximum loan amounts you will offer to your employees.
- Define the repayment scheme and decide on the interest rate you will apply to the loans. Will you follow the market rates or create your own scheme?
- Consider the retirement age in your organization. Employees should ideally repay their loans before they retire.
- Develop a plan for handling situations where an employee resigns while having an outstanding loan. Outline the debt repayment scheme in such cases.
- Establish procedures for loan recovery in the unfortunate event of an employee's death.
- Ensure that your loans are insured.
- Safeguard the housing loan documents of employees within the organization's custody until the loan is fully repaid.
- Allocate a budget for providing employee loans.
- Establish criteria for loan eligibility, such as tenure in the organization (e.g., employees who have been with the company for three consecutive years) or specific job grades.
- Set a limit on the total amount of deductions from employees' salaries, considering that pension fund contributions are deducted from the basic salary per government laws.
- Decide on the number of employees to receive loans per year and consider structuring them in batches with intervals between each batch.

Thank you.

From Oman, Muscat
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