Employee home loan
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The city of Seattle faced challenges in the early 1990s with high costs of living forcing many police and fire employees to live far outside the city, resulting in long commutes. In 1994, Seattle became the first employer to adopt the Hometown Home Loan program, which provides financial assistance to help employees purchase homes closer to work. This benefits both employers through improved recruitment and retention, and employees through education and subsidies to make home buying more affordable.
Employee home loan
- 3. STORY OF HOME LOAN Back in the early 1990s, the city of seattle faced a challenge. due to the high costs of living in the city, police and fire department employees were forced to live in surrounding suburbs and neighbouring cities, resulting in lengthier commutes. Hence proximitywas an issue To help solve this, the city of seattle was the first employer to adopt in 1994 the hometown home loan program, an employer-assisted housing benefit that helps employees of participating companies become homeowners the hometown home loan program helps both employers and employees. it enables employers to offer a low-cost, high-reward benefit to their overall benefits package, and employees get both financial help and real estate education to make smarter home buying decisions Source : Article of LORRI Freifeld ON HOME STREET.COM
- 4. WHAT IS EMPLOYEE HOME LOAN It is the facility given by the employer to the employee for purchase /construction / renovation of a house or a flat
- 5. PURPOSE To alleviate an employee's financial stress and the distraction it might cause in the workplace
- 6. WHY COMPANY GRANTS HOME LOANS It helps in attracting and retaining the employees of the organisation It also helps in building a strong employer employee relationship
- 7. HOME LOAN POLICY OF TJSB BANK ELIGIBILITY CRITERIA : 1. who have total banking service of 5 years in any bank 2. who have completed 1 year service in TJSB bank 3. If both the husband and wife are employed in the same bank, they shall be eligible for this facility only for one accommodation SOURCE : MEMORANDUM OF AGREEMENT OF TJSB BANK
- 8. TJSB bank grants this type of loan to its employees maximum on 3 occasions The staff member who has completed 20 years of service in TJSB bank is only eligible for loan on third occasion Loan is provided on third occasion when the staff member intends to purchase the better accommodation
- 9. MAXIMUM LOAN LIMIT AND THE RATE OF INTEREST OF TJSB cadre Service equal to or more than 5 years and below 10 years Service equal to or more than 10 years and below 15 years Service equal to or more than 15 years and below 20 years Service equal to or more than 20 years Officer in senior management level 32,00,000 40,00,000 45,00,000 50,00,000 Officer in middle level management 30,00,000 35,00,000 40,00,000 45,00,000 Officer in junior level management 20,00,000 25,00,000 30,00,000 35,00,000 peon 15,00,000 18,00,000 20,00,000 25,00,000 Source : Memorandum of Agreement of TJSB bank
- 10. RATE OF INTEREST APPLICABLE FOR ABOVE MENTIONED LOAN AMOUNT CADRE AMOUNT INTEREST RATE OFFICER IN SENIOR MANAGEMENT 22,00,000 4 % OFFICER IN MIDDLE MANAGEMENT 20,00,000 4 % OFFICER IN JUNIOR MANAGEMENT 15,00,000 4 % PEON 10,00,000 4 %
- 11. If any staff member intends to avail this loan facility for purchasing accommodation in the city or town where he/she is not posted and which will not be used for self occupancy, then the rate of interest is 8.5 % charged on the entire loan amount
- 12. REPAYMENT Repayment of loan is done in 300 equated monthly instalments including interest directly deductible from salary
- 13. HOUSING LOAN SUBSIDY POLICY OF ACC LTD 1. Policy : To provide assistance to employees for purchase of house 2. Purpose : To reduce the financial burden on management staff 3. Practices : Employees can obtain home loan directly from any bank of their choice the loan is admissible to an eligible staff if he/she purchases a house in his / her spouses name only Source : ACC HR MANUAL
- 14. ELIGIBILITY : oManagement staff will be eligible to get the housing loan subsidy one year after confirmation oEmployees are eligible for availing home loan subsidy from the company at the rate of 6 % per annum oThe maximum loan limit on which the subsidy is payable is mentioned in the individual perk sheet oIn case of multiple home loans, the subsidy will be earned on difference between the entitled maximum limit and the actual amount already availed as housing loan