Dear Friends, Can anyone let me know the difference between Loan opolicy and advance policy? . I am a bit confused on that ...Also need templates for the same . Thanks and Regards, Anuja
From India, Pune
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4From India, Pune
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"Loan" refers to a significant amount of money provided to the employee for a specific or valid reason.
Standard Clauses in a Loan Policy
- Minimum years of service rendered (e.g., 3 or 5 years)
- No history of pending loans
- Eligibility will be based on grade, monthly basic, or gross salary.
Reasons for applying for a loan might include education, marriage, housing, or hospitalization. The total loan amount will be divided into EMIs (with or without interest, depending on company policy) and deducted in equal installments from the employee's salary.
Advance Policy
"Advance" is an insignificant or smaller amount provided to an employee to meet petty personal expenses in case of a contingency. In normal instances, an advance will only be a small percentage of the salary and will be deducted from the next salary disbursement. The company may also offer travel advances, which must be repaid by the employee with detailed explanations and necessary support within a stipulated timeframe.
Hope this information is clear.
Regards
From India, Mumbai
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Standard Clauses in a Loan Policy
- Minimum years of service rendered (e.g., 3 or 5 years)
- No history of pending loans
- Eligibility will be based on grade, monthly basic, or gross salary.
Reasons for applying for a loan might include education, marriage, housing, or hospitalization. The total loan amount will be divided into EMIs (with or without interest, depending on company policy) and deducted in equal installments from the employee's salary.
Advance Policy
"Advance" is an insignificant or smaller amount provided to an employee to meet petty personal expenses in case of a contingency. In normal instances, an advance will only be a small percentage of the salary and will be deducted from the next salary disbursement. The company may also offer travel advances, which must be repaid by the employee with detailed explanations and necessary support within a stipulated timeframe.
Hope this information is clear.
Regards
From India, Mumbai
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Thank you for your prompt reply. Now I know that I need to frame a loan policy for an organization. Just a little bit more help, could you please let me know what is the standard percentage for availing a loan? For example, is it 1.5 times the gross or basic salary, or 2 times, etc.?
Regards,
Anuja
From India, Pune
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Regards,
Anuja
From India, Pune
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Employee reference policy.doc