How Employee Loan Management System helps

Does your company offer employee loans? Most companies do. And since you are reading this blog, you must consider something related. Don’t worry; we are here to help. This blog will discuss how the employee loan management system can help your HR team.

Suppose one of your employees or their family member has a health condition and needs extra cash to support the medical cost, which he doesn’t have; what would you do? Definitely, your company must step forward with a loan.

Today most companies have this facility for their employees. And this is good for your company because it increases employee loyalty. Besides, it is an extra pressure on your employees, affecting their performance. Therefore, the loan facility helps your employees focus on their work at the office.

However, employee loan management is not an easy task for your HR team. So how would you deal with this? We hope this is the question that leads you to this blog. Don’t worry; we are going to explain. But before that, you must know what an employee loan management system is.

What is an Employee Loan Management System?

An employee loan management system is a digital solution for your HR team that handles employee loans. It can also be an independent software. But in most cases, it is a module or feature in a comprehensive HR solution. Simply put, it is a tool that helps you streamline the employee loan process.

Without any doubt, loan management is a critical job. It becomes more critical for your HR manager because they need to adjust the loans monthly with salaries which is an extra burden for your HR team.

Well, if your company is small, maybe your HR team can make the adjustments quickly. Still, they will waste some valuable time. However, for big companies, loan management becomes very tough. Don’t even ask how much time it takes to adjust hundreds of loans.   

So, an employee loan management system or feature in your HR system is very important for smart office management. Now let’s learn how an employee loan management system can help your HR team in detail.

How Employee Loan Management System Helps  

Like an HR solution, automation of your employee loan management is crucial. It comes with countless benefits. And for large companies, it is a must-have feature in the HR system. Let’s, take a look at how it helps.

1. Paperless Loan Application

Go paperless! One of the best things about an employee loan management system is that it makes your office paperless. Think about the time when offices used piles of papers to run their business. But today, it seems really different.

From onboarding to provident fund management, the HR team does everything with HR software, especially in a smart office. However, a significant number of offices still lack digital aid, especially for employee loans. Though most offices use HR software, their system lacks good employee loan management features.

Therefore, it is very important today that you have a good HR solution with a better loan management system. It will make the application process easier for your employees. Besides, your HR team will have less pressure.

2. Easy Evaluation Process

Employees first submit their applications to HR managers in the paper-based loan application process. And then, the application passes a few other tables to reach its final evaluation process. Doesn’t it sound painful? We guess it does.

So, the evaluation process is a very hectic job for HR managers. On the other hand, it is a kind of process that also annoys management. An HR solution with a loan management feature can ease the pain in this situation.

Employee applies for a loan without even talking to anyone. Then the HR manager evaluates the application before sending it for final approval to management. Meanwhile, management and HR can even do it on the fly. So, if someone needs an urgent loan, they can get it easily.

3. Automated Loan Adjustment

The most important benefit of the employee loan management system is the automated loan adjustment. You can avoid repeated monthly loan adjustments with a comprehensive HR system integrated with a loan management module.

Without a digital solution, HR managers must calculate the loan repayment monthly. Moreover, they need to adjust the loan repayment with the salary. We know this is an important task for your HR team. But don’t you think this is a waste of time when you have options?

No doubt, it is a waste of time, especially when you can automate the loan management with your HR software. So, don’t waste your time anymore; go for a loan management module.

4. 24/7 Reporting

The employee loan management system or module comes with pre-defined reporting. Thus, your HR team does not need to prepare any reports on employee loans. Like all other reporting in an HR solution, you can generate reports easily with a few clicks.

On the other hand, in manual reporting, you can’t prepare a report quickly. You have to draw all the accounts before you prepare a report. But your report is at your fingertip if you have a technology-based system. You don’t even have to wait for your HR manager to report you because you have access to your system anytime.

However, if you have a cloud-based system, you can even access loan reports 24/7 from anywhere on any device.  

5. Reduces HR Works

An employee loan management system can reduce HR work significantly. Since application, evaluation and loan adjustment become automated, there is no need for your HR team to work on the loan issue. Rather your software will do everything automatically, and you just need to command it.

Besides, loan-related reporting is only a few clicks away. Because your HR system already has pre-defined reporting, including employee loans. So, when you generate your payroll, a loan adjustment is automatically made every month.

Undoubtedly, those still doing their work manually spend a lot of person-hours on employee loan adjustment. Therefore, an HR solution with a loan management module will reduce pressure on your HR team. Even you can keep your team smaller.

6. Save Management Cost

Last but not least, automated loan management reduces operational costs. Like the whole HR system, it also contributes significantly to your office operation, reducing human effort without any mistakes.

Moreover, the loan management system can do months of work in just a few clicks. So eventually, it helps you do your work in no time. And no time means no expense. As a result, your HR team can save time from this.

On the other hand, you can even keep your HR team small with the system. It also helps you save on paper costs.

In short, the employee loan management system is a much-needed tool for the modern-day office. With a good system, you can automate the entire loan management process. It can help you access the report anytime you want. And eventually, it saves operational costs significantly.