Dear Raviraj,
We faced problems when employees availed personal loans from financial institutions.
When the financial institutions approached us to discuss their proposal, we made it clear that the company will only recover the loan amount to the extent of the employee's salary. However, if for any reason the employee does not earn a salary, the company will not make an upfront payment for the loan amount and will recover it later from the employee.
Similarly, if the employee leaves the organization, the company will only send an intimation to the financial institution to this effect, and the company will not be liable for recovering the balance loan amount from the employee's full and final settlement. Initially, these institutions refused to accept our conditions, but we were firm, and finally, a letter to this effect was signed by me and handed over to the financial institution, with the duplicate acknowledged by them. Subsequently, when the salary fell short of the EMI or when the employee left, we merely wrote a letter to the financial institution for recovering the amount.
Regarding Maheswari's query, you cannot recover any dues from the Gratuity amount, and dues to the extent of salary, leave encashment, LTA, and Medical reimbursement expenses alone can be recovered.
Never entertain personal loans from the company as this will be difficult for you to defend your case when the employee leaves the organization. It is also advisable not to recommend any personal loan amount employeewise statement to any financial institution as this will be a document binding on the company.
M.V.KANNAN
From India, Madras
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270We faced problems when employees availed personal loans from financial institutions.
When the financial institutions approached us to discuss their proposal, we made it clear that the company will only recover the loan amount to the extent of the employee's salary. However, if for any reason the employee does not earn a salary, the company will not make an upfront payment for the loan amount and will recover it later from the employee.
Similarly, if the employee leaves the organization, the company will only send an intimation to the financial institution to this effect, and the company will not be liable for recovering the balance loan amount from the employee's full and final settlement. Initially, these institutions refused to accept our conditions, but we were firm, and finally, a letter to this effect was signed by me and handed over to the financial institution, with the duplicate acknowledged by them. Subsequently, when the salary fell short of the EMI or when the employee left, we merely wrote a letter to the financial institution for recovering the amount.
Regarding Maheswari's query, you cannot recover any dues from the Gratuity amount, and dues to the extent of salary, leave encashment, LTA, and Medical reimbursement expenses alone can be recovered.
Never entertain personal loans from the company as this will be difficult for you to defend your case when the employee leaves the organization. It is also advisable not to recommend any personal loan amount employeewise statement to any financial institution as this will be a document binding on the company.
M.V.KANNAN
From India, Madras
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Thank you for your helpful hints. It's been a pleasure for a site of this nature to have this opportunity where ideals are shared amongst people, and it does help so much.
Once again, thank you for these wonderful hints on the staff loan policy.
From Nigeria, Lagos
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Once again, thank you for these wonderful hints on the staff loan policy.
From Nigeria, Lagos
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Dear members, If employee is taking persoanl loan from employer what documents one need to make and what precuations for repaymnet shall be taken Thanks in Advance
From India
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From India
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i am mayur rana i live to surat my contact no 9687950950
From India, Jalalpur
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From India, Jalalpur
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To know the need for money and to borrow wisely is a wise man's approach in a start-up concern. Understanding the need for money and its leverage in the long run is essential. It is necessary to be prudent in capital purchases, not borrowing more than necessary. Limiting the demand and borrowing significantly less than the requirement will help leverage cash flow in the business sensibly.
Choosing the borrowing institution carefully is crucial. Avoid borrowing at high-interest rates or from money lenders; instead, opt for registered government banking sectors. Compare various schemes available to select the right repayment schedule aligned with the business's cash flow.
Stay vigilant against loan sharks who seek maximum leverage on the money lent. As a placements consultancy in Bangalore, our human resources are our income source for survival, and we charge for the services offered. Lenders may impose charges on borrowings through service and documentation fees, which can be negotiable.
Bankers determine the overdraft limit based on the securities pawned or the account holder's repayment capacity. Interest is charged only for the borrowed amount, and repayment can be scheduled according to cash flow.
Borrowing should be calculated based on repayment schedules, varying depending on the business's cash flow and long-term goals. Short-term borrowings are recommended to reduce interest payments in the long run, while long-term business plans require asset accumulation strategies.
Maintaining a monthly record of payments and overheads is crucial for productivity in all departments. Removing unproductive employees is a continuous process for organic growth.
Avoid a luxurious lifestyle once borrowings are in place in the business. Prioritize closing lenders quickly to achieve a cash surplus status. Make purchases focusing on quality and pricing, maintaining positive relationships with vendors for favorable payment terms.
Regularly review business systems to control recurring expenses and avoid unnecessary costs. Be prepared to handle unforeseen situations such as delayed payments, competition, economic slowdowns, seasonal changes, and evolving technology.
During business loan periods, communicate honestly with family members about the business situation and seek their cooperation in managing expenses.
No business thrives without loans, and an entrepreneur's dream is achieving a cash surplus status. Only a savvy entrepreneur can navigate loan struggles successfully, supported by their family.
From India, Bangalore
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Choosing the borrowing institution carefully is crucial. Avoid borrowing at high-interest rates or from money lenders; instead, opt for registered government banking sectors. Compare various schemes available to select the right repayment schedule aligned with the business's cash flow.
Stay vigilant against loan sharks who seek maximum leverage on the money lent. As a placements consultancy in Bangalore, our human resources are our income source for survival, and we charge for the services offered. Lenders may impose charges on borrowings through service and documentation fees, which can be negotiable.
Bankers determine the overdraft limit based on the securities pawned or the account holder's repayment capacity. Interest is charged only for the borrowed amount, and repayment can be scheduled according to cash flow.
Borrowing should be calculated based on repayment schedules, varying depending on the business's cash flow and long-term goals. Short-term borrowings are recommended to reduce interest payments in the long run, while long-term business plans require asset accumulation strategies.
Maintaining a monthly record of payments and overheads is crucial for productivity in all departments. Removing unproductive employees is a continuous process for organic growth.
Avoid a luxurious lifestyle once borrowings are in place in the business. Prioritize closing lenders quickly to achieve a cash surplus status. Make purchases focusing on quality and pricing, maintaining positive relationships with vendors for favorable payment terms.
Regularly review business systems to control recurring expenses and avoid unnecessary costs. Be prepared to handle unforeseen situations such as delayed payments, competition, economic slowdowns, seasonal changes, and evolving technology.
During business loan periods, communicate honestly with family members about the business situation and seek their cooperation in managing expenses.
No business thrives without loans, and an entrepreneur's dream is achieving a cash surplus status. Only a savvy entrepreneur can navigate loan struggles successfully, supported by their family.
From India, Bangalore
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