Items Covered

• An installment agreement loan between an employer and employee should clearly outline the loan's purpose, the terms and any applicable interest rate charges. The paperwork should also specify repayment terms in the event of termination or resignation. To be a legally binding agreement, the loan must be signed by both parties.
  
  

Repayment Method

• The installment loan agreement should include methods of repayment. In most cases, the employer will opt to deduct the installment amount from your salary each pay period. However, employers can also opt to receive a payment directly from the employee. In either case, late payment fees and accrued interest clauses should be added to the agreement.
  
  

Considerations

• Employers that extend credit to employees can end up in dicey situations, especially if the employee is terminated before the loan balance is paid. Because of this, few employers will make an advance on an employee's salary.