The loan that satisfy the consumer needs
Anyone looking for a loan to satisfy their consumer needs should ask their boss: Employer loans are gaining popularity in Germany. The advantage for borrowers who pump their boss: this often requires less interest and collateral than the bank. The full installments can then conveniently be withheld directly from the salary. Even if the willingness of medium-sized companies to lend money to employees was moderate due to the financial crisis, many may find themselves in a favorable position. Companies by no means grant the loans out of generosity, but pursue their own interests: those who have taken out a loan from their boss are unlikely to leave the company too quickly. Good employees can thus be tied to the company.
As a result, only deserving employees who are important to the company receive a loan from the boss. However, if the interest rate is too favorable, the monetary advantage may need to be taxed: According to the Federal Ministry of Finance, the calculation is based on the most favorable interest rate available on the open market.
The key points for employer loans
In the case of employer loans, there are a few key points to keep in mind so that there is no conflict with the law. For example, the loan must never be used to buy products from the boss: lending to employees to finance their own offers is prohibited. In addition, the loan agreement should clearly state how much the amount paid out will be and what it will be liable to repayment, so that social security funds do not receive a covert wage payment. Furthermore, the interest rate should be explicitly stated. If this is omitted, the loan is interest-free. If no repayment periods have been agreed, the employer has the option to terminate the loan without notice when the employment relationship ends. Otherwise, it remains even after leaving the company by the borrower at the agreed payment intervals. However, any special conditions for the interest may then cease to exist and give way to market conditions.