Payroll loans: what they are and how they work - Bayport Financial Services
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Payroll loans: what they are and how they work

Published: June 18, 2020
Categories: Financial Wellness, Uncategorized

A cornerstone of Bayport Money Solutions – our financial wellness programme for employees – is payroll lending. This means that the instalments on your Bayport loan are deducted directly from your salary, in terms of an agreement between your employer and Bayport. Why is this a good idea? Let’s find out more.

How does a payroll loan work?
Payroll loans are only available to employees of companies that have an agreement with Bayport to implement the Money Solutions programme. The aim of this programme is to help over-indebted employees gain control over their debt, and to give all employees the tools and knowledge to manage their money better.

If you, as an employee, decide to take out a Bayport loan, either to consolidate your debt or to achieve another financial goal, you sign a loan agreement with Bayport.

Based on the terms of the agreement and the agreement Bayport has with your employer, Bayport submits all the necessary information to the company’s payroll department so that the instalment can be deducted from your salary and paid over to Bayport.

No money can be deducted from your salary without you agreeing to it in the contract you sign with Bayport. This is the difference between a payroll loan and a garnishee order.

What are the benefits of a payroll loan?
Benefits for you:
  • You are protected. By law your employer has to make sure that debt repayments do not exceed 25% of your gross pay.
  • You save. There are no bank charges involved in a payroll deduction.
  • Convenience. You don’t have to make any special arrangements to repay your loan – the instalments are deducted automatically. With Bayport on site, it is also easy for you to do business with us, and have your questions answered and problems resolved.
  • Cheaper credit. The agreement between Bayport and your employer guarantees you a lower interest rate on your loan.
Benefits to Bayport:
  • The risk of you not repaying your loan is very low, which is good for our business. As a result, we can offer you a significantly better deal than we offer other consumers.
  • We have an opportunity to work closely with you to help you achieve long-term financial wellness.
  • Your employer gives us time at work to engage with you, making it easier for us to do business with you.
Benefits to your employer:
  • Employees who are not worried about money are more productive and less likely to make mistakes and break safety rules.
  • Better employee relationships.
  • The reputation as a responsible, caring employer.

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