Sample HR Letter: Grant of Personal Loan
It is not a common practice of most companies to grant their employees personal loan, take into consideration of the risk that may be faced by the Company when the employees fail to make repayment, or absconded, and the tedious procedures and cost that may incur in order to recover the default of such loan. However, if any personal loan is granted to an employee, it is advised that the repayment shall be deducted from the employee’s monthly salary, in order to minimise such defaults. For this purpose, an agreement shall be obtained from the employee before the loan amount is disbursed, which the sample of such agreement is as follow:
<Ref. No.>
<Date>
<Name>
<Designation / Department>
Dear <Name>,
Personal Loan
Please be informed that your application for a personal loan of <amount> from the Company as been approved.
Please note that the loan is granted on your agreement on your agreement to the following terms and conditions:
-
That you shall repay the total loan disbursed through deductions from your monthly salary at <amount> per month commencing from <month, year> salary. In this regard, you are to authorise the Company to make monthly deduction of <amount> per month over <number of> instalments until full repayment of the loan sum of <amount>.
-
If you leave the Company’s service due to resignation or dismissal / termination or the loan is being recalled / withdrawn, you shall repay the Company immediately on outstanding loan sum. For this purpose, the Company is entitled to set off from the outstanding balance loan sum against whatsoever monies due and payable by the Company to you.
-
It is also agreed that should the Company be forced to seek legal advice / commence legal proceedings to enforce its rights under this agreement, the Company shall also be entitled to claim its solicitor-client fees in addition to the sums due and owing to it from you.
If you agree to the above, please acknowledge receipt of cheque for <amount> and to authorise the Company to deduct <amount> per month from your monthly salary commencing <month, year> until the total loan sum is repaid.
Yours faithfully,
<Company Signatory>
*************************************************************
Acknowledgement
I fully understand the terms and conditions and hereby acknowledge receipt of the cheque for the sum of <amount>. I also authorise the Company to make monthly deductions from my salary towards repayment of the loan as per Appendix 1 (Repayment Schedule shall be attached) enclosed.
<Employee Signatory>
<Date>
