We have implemented loan policy in our comapny. We have made it simple by bifurcating in 2 segment. 1) Critical Loan. This includes loan requirement for any medical emergency for the employee or employee’s blood relative. 2) Non-Critical Loan. This includes all the other financial assistance employee need. It can be to support the home loan, car loan, two wheeler loan or personal loan.
Then you need to define eligibility for these loan and what amount employee can request as loan along with repayment period.
You need to define then rate of interest, that you may bifurcate based on the designation or flat based on the work culture of your organization. Taking loan is a privilege provided by the organization, so if required, that can be provided after getting tenure commitment from the employee i.e: Employee Bond either of 1/2/3 years based on the process and policy
You need to define a proper process from loan application to approval and disbursement. Try to reduce the manual intervention as less as possible to provide a smooth and fast employee experience.
Please note, you need to calculate perquisite on the offered loan and add in the employee’s salary for TDS implication.
Hope this information would help you to create a loan process and policy.