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Should I lend my helper money or help pay off her loan?

It is ultimately up to you to decide if you are willing to loan your helper money. Whether or not you are willing to lend to her, you can make sure she gets gets access to professional help in order to address the core issue of financial management. This would give both her and yourself peace of mind, knowing that she has the tools to be financially stable. Managing money is hard for everybody but these skills can be learned. As an employer, it is important to remember that you are not her financial advisor. 

Have a discussion with your helper about the reason for the loan. Is she comfortable telling you why she needs the money? Is it for a ‘need’ or a ‘want’? What would her options be if you were not to lend her the money?

Here are some things to consider when making this decision:

If you do decide to lend money 

  • Set up a written agreement about the amount, how she will be paying for it, the length of repayment time and how much will be repaid per month. 

  • Note that repayment cannot be deducted from her salary and must take place in a separate transaction, i.e. you must pay her her full salary each month. 

  • As part of the repayment agreement you can recommend that your helper attends financial education workshops at Enrich.

If you decide to not lend money

  • You can still support her by providing her information. If she decides to borrow from a money lender, you can encourage her to check the following before signing a loan contract:

    • The total loan amount, interest rate and repayment schedule

    • If she can afford the monthly repayment and late fees

    • If the lender is licensed with the Licensed Money Lenders Association. Warn her against borrowing from friends/illegal lenders which will leave her unprotected

    • If she will receive certified documentation.

    • If the lender wants to keep her passport - no one is allowed to keep her passport except for herself or the authorities.

Regardless of your decision, you can ensure that your helper gets professional advice, either through our workshops or our one-to-one financial counselling sessions to discuss steps forward and learn about debt management, goal setting and budgeting. You can even sponsor her to attend our courses.