Employee loan request

Dear HR Community

We have an employee who has requested a loan from us, the employer.

As this is the first time that we have come across such a request, I seek your guidance on:

1. Whether companies here offer employee loans.

2. If you do, then how much do you offer employees based on their salary and how do you ensure that they repay and don't "disappear" especially if they are foreigners with a work pass?

Thank you for your views and comments in advance.




HR Poll: Does your organisation offer loans to employees?

Yes: 39.58%

No: 43.75%

Maybe: 10.42%

Not sure: 6.25%




Hi Rina, we typically do not offer 'personal loans' but if the employee has a really valid reason, it will be a salary advance and reviewed on a case-by-case basis (so that it does not set a precedence for all employees to come to us for loans after that). - Carol

We are setting up a loan policy and incorporating interest, and repayment agreements. It is up to the company to set the limit of the loan amount. - Erin

The company can consider providing loans as a benefit. - Eva

Our Company does not offer loans as part of the staff benefits to our employees. - Lynn

If you have such a loan policy, you might be provided with a maximum of 30% of your salary or 1 month's salary.

1. Yes, our employee is eligible for staff loan if they are confirmed employees who have completed at least 2 years of service with the Company. 2. The quantum is the maximum loan amount shall not exceed one year's salary excluding the bonus of the employee and the amount shall not be $30K. We are from Finance Industry.

We do not have a loan policy but do offer salary advances on a case-to-case basis with some internal criteria if approached by staff. The 'repayment' is done through a salary deduction of an agreed some (ensuring not more than 25% of the salary) from the 2nd month of advancement. - Cherie

Based on my experience, unless the worker has been in employment for more than 3-5 years at that company with good performance, then we consider approving the loan. I have seen some disappear after getting a loan from the company even with a signed agreement. They are not serious and, in such cases, the company will bear the loss. The loan approval and amount will depend on the reasons given and is based on the monthly payment amount. - Michelle

We do offer salary advance (loan) only for confirmed employees for reasons such as funeral expenses of family members, marriage, and festive occasions (Hari Raya/CNY/Deepavali) normally max 1 month's salary. - Dew

We base the requests on HOD recommendations and usually are for long-serving deserving staff. - Gladys

The company should pass the liability to a third party if interest is charged on the loan, as I don't think it's right to charge interest to your own employee, so passing this over to a licensed organisation is better. - WTP



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