What are the alternatives to an employer's personal loan and are they worth it?

Taking out a salary loan for private employees is an alternative to meeting a financing need. This unallocated loan solution allows you to borrow money without having to justify its use. This can be, for example, buying a car, household appliances, a trip, etc.

Here are the main characteristics you need to know in order to understand an employer's personal loan:

• This is financing provided by an employer who can accept or reject a loan application;
• Its amount is unlimited, and the employer can choose whether or not to apply the interest rate;
• It is advisable to formalize this loan agreement with the employer in writing;
• As a rule, it is exempt from tax.

Features of this type of loan

Be careful to clearly state this concept of employer credit in the contract. Without interest, this service from the employer can easily be compared with a salary advance.

What do I need to know about the refund?

Repayment terms vary depending on whether it is a loan with or without an interest rate.

• If the loan is granted to the employer without interest, compensation can be deducted from wages in the amount of up to 10% of the remuneration;
• If the loan is provided with interest, the employee must pay the employer a monthly payment to repay his debt (unrelated to his employment contract).

Alternatives to this type of loan

Family loan

Another solution besides an employer loan is to borrow money from a family member. This option is no less advantageous, since the amount is unlimited and most often the money is lent without interest. In addition, the terms of compensation are relatively flexible, since they do not depend on the professional position.

Consumer credit instead of employer credit

You can also consider a traditional consumer loan. This financing solution has many advantages over an employer loan.

Microcredit, simple and fast loan 

A micro-loan is a reasonable alternative to an employer loan when looking for a quick financing solution. With the help of a micro-loan, you can get a loan in the amount of 100 to 5000 euros in just 24 hours. These funds can be freely used to finance a small project or meet an urgent need for funds. However, always keep in mind that the interest rate on a micro-loan varies greatly, usually from 0.5% to 21%.

Revolving credit: Reserve is always available.

If the employer's loan cannot be obtained, a revolving loan can also be considered. This type of consumer loan is really useful when you need money. This allows you to have a reusable amount, usually from 500 to 6000 euros.

Car/motorcycle loan for a more targeted project.

If the need for money is related to the purchase of a two-wheeled vehicle, electric car or thermal car, new or used, a car/motorcycle loan is a reasonable option. With a car/motorcycle loan, you can take out a loan in the amount of 500 to 75,000 euros for a repayment period of 3 to 84 months. Since this is a loan allocated for a project, the interest rate is more favorable (on average 3%) than for an undistributed consumer loan.

Conclusion

While an employer's personal loan offers flexibility and tax benefits, alternatives like family loans, consumer credit, microloans, revolving credit, and car/motorcycle loans provide additional options. Each has its own advantages, making it essential to choose based on specific financial needs and terms.