Alex How are outstanding loans treated for terminated employees?
When a participant with an outstanding loan is terminated there are three (3) options: 1) The former employee can pay back the entire balance within 90 days. The participant should write a check to the Plan and send it to the former employer who will include it in a transmittal to the /custodian.
Is there any money left after voluntary termination?
In some cases, it may also include the price of Guaranteed Future Value. This amount doesn’t include any late payment fees or arrears you may have accumulated. As long as there is no damage to the car and you pay back 50% of the Total Amount Payable, then there should be nothing left for you to pay.
What are the main issues with voluntary termination?
The main issue is usually that finance companies and car manufacturers don’t like voluntary termination. They won’t willingly guide you to this option and won’t be much help if you try to enact it. This has lead to many peoples’ experiences with voluntary termination being confusing and drawn out.
Can a car finance deal exclude voluntary termination?
It is a statutory right and as such, it can not be restricted or excluded within the terms and conditions of any car finance deal. How do I enact a voluntary termination agreement?
When a participant with an outstanding loan is terminated there are three (3) options: 1) The former employee can pay back the entire balance within 90 days. The participant should write a check to the Plan and send it to the former employer who will include it in a transmittal to the /custodian.
In some cases, it may also include the price of Guaranteed Future Value. This amount doesn’t include any late payment fees or arrears you may have accumulated. As long as there is no damage to the car and you pay back 50% of the Total Amount Payable, then there should be nothing left for you to pay.
When does an employee have to repay a 5 year loan?
The law provides an exception to the 5-year requirement if the employee uses the loan to purchase a primary residence. Loans to an employee that leaves the company Plan sponsors may require an employee to repay the full outstanding balance of a loan if he or she terminates employment or if the plan is terminated.
The main issue is usually that finance companies and car manufacturers don’t like voluntary termination. They won’t willingly guide you to this option and won’t be much help if you try to enact it. This has lead to many peoples’ experiences with voluntary termination being confusing and drawn out.