Is getting a loan from your workplace a low risk loan?

[King Belieal]

There are some workplaces that give loans to their staff. And the loan is always drawn out from the salaries of the staff directly by the organisation.

Do you think that getting a loan from your workplace is a less risky place to get loan and not get burnt?

 

[gwolf666]

Personally, I believe that obtaining a loan through your employer can be a convenient option, but not necessarily a safer one. On the one hand, it's often more accessible and involves less paperwork than a traditional financial institution, and in some cases, it may have lower interest rates. However, there are also risks, such as losing your job or having problems with your employer, which can complicate loan repayment or even jeopardize your job security. Furthermore, relying on payroll deductions can leave you with less money available for other needs or emergencies. In my opinion, while it may seem like a practical solution, it's always important to assess whether you can truly repay the debt without impacting your budget and to consider other financing options that may offer greater security and flexibility. The key is to be cautious and avoid over-indebtedness.

 

[Stardom22]

Of course yes it's seems to be so. However according to me every kind ya loan has their advantages ond disadvantages. For instance every loan must be paid in time to avoid late payment penalties and negative credit reports.

 

[Kross]

It is low risk loan because you can actually negotiate with your workplace for a longer timeframe for repayment.

 

[Augusta]

Yes, employee loans are generally lower risk for borrowers than traditional loans, you can leverage an employee loan to effectively reduce the strain on your finances.

 

[Min George]

I don't even think the employee loans are really low risk loans. One can lose full income as loan would be deducted directly.

 

[Starmix]

There is no loaning at the university where I work; however, there is a cooperative, but still, no loaning is allowed. Other companies allow it with a very small percentage of interest.

 

[Augusta]

I don't even think the employee loans are really low risk loans. One can lose full income as loan would be deducted directly.

Yes they are Unsecured loans that are not backed by any security and are high risk loans

 

[eLdavis]

I don't think this classifies as a low risk, it might only be low risk for the lender cause he can actually make an agreement where you have to pay with your salary.

 

[Springtime]

I would not classify that as a low-risk loan for the borrower. But for the company, lending money to an employee is relatively low risk as the employer can deduct salary from the staff when necessary.

 

[Tobi]

As long as you pay a market-relevant rate of interest on the loan, and taking out the loan doesn’t breach any covenants in existence from company among various crowds, like bankers, investors, etc. — nothing about this is illegal. Not paying interest on the loan would be interesting tax-wise because it would strongly bring into question whether this is a loan or a disguised salary schedule.

 

[Kross]

It may be seen to be a low risk loan because personal assets are not used as collateral to get the loan.