An employee loan is the amount of money sanctioned by the organization to help the employee in need. It is a form of financial assistance provided by the business to the employee. By lending the money to its employees, the organization lightens the financial burden on the employees. The employee may be unproductive at work if he is carrying a substantial financial burden on his shoulders. By easing the difficulties, the organization improves the relationship with the employee and increases their productivity to have a positive impact on their work performance in the organization. This is also a crucial way to retain the employees by guaranteeing that the organization is with them through their thick and thins. Providing financial aids to the employees increases their loyalty towards the company, and their dedication becomes stronger. The Loan to Employee Policy provides provisions regarding the sanction and repayment of such loans.
Having a policy that clarifies applying, sanctioning, and repaying such loans is necessary. Without it, the chances of non-payment, breach of contract, or fraud by the employee are high. Support and encourage your employees to share their financial burden with you by providing explicit provisions about the same. Download our configurable and self-explanatory Loan to Employee Policy Template now to increase your employee’s loyalty towards your organization.