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The Employee Loan Agreement serves as a crucial document for Indonesian companies offering financial assistance to their employees. This agreement is commonly used when employees require financial support for various purposes such as education, medical expenses, housing, or personal emergencies. The document must comply with Indonesian labor laws, particularly the Manpower Law and civil code provisions governing loan agreements. It typically includes detailed terms about loan amount, purpose, repayment schedule through salary deductions, interest calculations (if any), and procedures for early repayment or employment termination. The agreement protects both employer and employee interests while ensuring transparency in the lending arrangement and compliance with local regulatory requirements.

1. Parties: Identifies the employer (as lender) and employee (as borrower) with complete legal names and addresses

2. Background: Sets out the context of the loan agreement, including the employment relationship and purpose of the loan

3. Definitions: Defines key terms used throughout the agreement

4. Loan Amount and Purpose: Specifies the loan amount, currency, and approved purpose of the loan

5. Disbursement: Details how and when the loan amount will be provided to the employee

6. Repayment Terms: Specifies the repayment schedule, installment amounts, and method of payment (including salary deductions)

7. Interest: States whether interest is applicable and if so, the rate and calculation method

8. Employee Covenants: Employee's obligations and commitments regarding the loan

9. Early Repayment: Terms and conditions for early loan repayment

10. Employment Termination: Consequences and handling of the loan in case of employment termination

11. Events of Default: Circumstances constituting default and consequences

12. Governing Law: Specifies Indonesian law as the governing law

13. Dispute Resolution: Process for resolving any disputes related to the loan agreement