Personnel Loans

2007-03-08 10:33:40

( Financial )



Loans in General
A loan is a contract that involves a lender and a borrower. The lender will give money to the borrower, who promises to repay the money. Commercial loans usually involve payment of interest, and sometimes, the giving of security.

Personnel Loans
Personnel loans are loans that an employer grants to employees of the company. It is a benefit that is usually given to employees who have been granted regular status, as opposed to employees on probation. A pay advance is a form of a personnel loan.

Personnel Loan Versus Personal Loan
Personnel loans require an employer-employee relationship. A personal loan is any loan that is granted to an individual, as opposed to corporate loans, which are granted only to corporations. A personal loan may or may not require collateral or security. This will depend on the lender or the lending institution, and the credit and reputation of the borrower.

Kinds of Personnel Loans
Personnel loans are usually granted to employees as a benefit and recognition of their value as employees of the company. Personnel loans can be used for specific purposes. They can be used to obtain a vehicle, in which case it is a car loan. It can be used to obtain equipment, such as a laptop, in which case it can be termed a personnel loan for the purchase of equipment.

Advantages of a Personnel Loan
A personnel loan is more likely to be granted, given the prior relationship of the parties. It is also easier to collect the dues for the loan, as a pay deduction method can easily be devised. In light of this, personnel loans are not likely to require security or collateral. Some personnel loans may also offer better interest rates than other commercially available loans. This is, of course, a function of the generosity of your employer, and it may even be the case that some personnel loans provide for exorbitant interest. In such a situation, you have the option of searching for a cheap personal loan with more competitive rates.


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