The payroll loan is one of the most requested forms of credit in the market, and can be made by public officials, private, INSS beneficiaries, and agents of military forces. Because of its low interest rates, the demand for such a loan is high, especially for private employees.
In this article we will talk a little more about the two main advantages for your company to offer private payroll loans. But first, you need to understand how it works. Check-out!
Private Payroll Loan
As its name suggests, this type of credit is fully linked to the company, which provides employees with a line of credit through a partnership agreement with the bank.
The bank thus has access to the data of credit requesting employees. And this, in turn, evaluates the employee profile to make available the requested amount.
Those who are negative, for example, may be denied credit to the bank, or even the company itself may be denied the employee credit, due to problems such as planned dismissal or recurring absences at work, for example. However, these impediments are not a rule. Depending on the institution, the payroll grant is approved even for those with the name “dirty”.
Once the amount requested is approved, the employee will receive the money on his account and monthly installments will automatically be deducted from the employee’s payroll.
In cases where, after negotiation and gain of credit, the employee is dismissed, he may have up to 30% of his termination directed directly to the debt settlement. This, in turn, gives the bank greater assurance, as the employee does not have the option of not repaying the payroll loan amount, reducing default.
For employees, the benefits are also diverse as no guarantor is required. Rates are also much lower compared to credit card rates, for example ranging from 1.4% to 3% per month, depending on some factors. The credit limit is also attractive, as the payroll loan ceiling is 30% of the employee’s salary.
Advantages for Companies
In addition to the benefits for banks and employees, companies also benefit from this practice.
1.Improves Your Employee’s View of the Company
Helping your employees achieve their life goals or even paying off their debts will always be a very popular practice for them, and payroll loans are a great option for that. As it is also available to negatively named employees, they will see in your company the opportunity to get a loan, which would not be possible by traditional means.
As a result, the worker is less concerned and can of his job with much more ease and willingness. Gratitude for the business increases, and happiness in achieving something you so desire only enhances your perception of the workplace. This makes them more productive and committed to your business, thereby improving your earnings and growth.
2.No risk to Company
Despite being an intermediary between the bank and employee relationship, the private payroll-deductible loan generation does not cost the company and the financial risk in case of default employee, even if the employee is dismissed or resigns in the period of the installments.
This is because all the risk in this regard is the institution (bank) that provides this credit and has to actually receive it. Nonetheless, the chances of default occurring are slim to none, as the rebate is automatic, even in the event of termination.