Employer Loan – A Special Form of a Loan

Employer Loan for your major needs

Employer Loan for your major needs

A loan can not just be taken out by a bank alone. Because in addition to the loans from other commercial third-party providers, there is also the personal loan or the employer loan. The employer loan is awarded directly by the employer to his employee. Thus, the employee does not have to go to the bank to apply for a loan, but can apply for the loan directly from his employer. As a result, he can enjoy several advantages over a regular bank loan, but even the employer who lends the loan generally hopes to gain some benefits. Employer loans are usually given only to long-standing and good employees who are also in the future to work in the company and want to bind the employer by the employer loan more closely to the company.

Employees often use the employer loan for major purchases, such as buying a car or renovating living space. The duration is often several years, but of course there are certain limits in height. The employer loan is paid directly by the employer to the employee’s account. In some cases, the employee must sign a waiver in advance for the duration of the loan or for a longer period. As a result, the employer has a relatively low risk of loss since he can simply withhold the monthly installments from the salary of the employee. The employee thus receives only the salaries reduced by the loan installments.

The employer loan is often granted even without interest. As a result, the employee can also save the costs compared to a bank loan. Of course, a loan agreement is also issued for the employer’s loan, which may also be confirmed by a notary public, in order to establish the modalities.

The employer loan is a special form of the loan. This is not a personal loan, but a loan from a non-bank business to a private individual. The company must therefore take the loan into account accordingly. Especially in larger companies employer loans are offered to bind managers and other important employees to the company and to keep long term.