Employee Car Loan Agreement Template for India

The Employee Car Loan Agreement is a crucial document used when companies in India offer financial assistance to their employees for purchasing vehicles. This agreement template is designed to comply with Indian legal requirements and typically includes comprehensive details about the loan amount, interest rates, repayment structure through salary deductions, and specific provisions regarding vehicle ownership and security arrangements. It's particularly relevant for companies offering car loans as an employee benefit, ensuring clear documentation of obligations, rights, and responsibilities of both parties. The agreement incorporates necessary safeguards for loan recovery, especially in cases of employment termination, while maintaining compliance with Indian contract law, employment regulations, and financial guidelines.

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

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

3. Definitions: Defines key terms used throughout the agreement including Loan Amount, Vehicle, Interest Rate, and Repayment Period

4. Loan Details: Specifies the principal amount, interest rate, loan tenure, and purpose of the loan

5. Disbursement Terms: Details how and when the loan amount will be disbursed, including any conditions precedent

6. Repayment Terms: Outlines the repayment schedule, EMI amounts, and method of payment (typically salary deduction)

7. Vehicle Details: Specifications of the vehicle being purchased, including make, model, and registration details

8. Security and Ownership: Establishes the employer's security interest in the vehicle and ownership arrangements until full repayment

9. Insurance Requirements: Mandatory insurance coverage requirements for the vehicle

10. Employee Covenants: Employee's obligations regarding vehicle maintenance, usage, and compliance with traffic laws

11. Events of Default: Circumstances constituting default and consequences thereof

12. Termination Provisions: Handling of the loan in case of employment termination or resignation

13. Governing Law: Specifies Indian law as the governing law and jurisdiction for disputes

14. Execution: Signature blocks and execution formalities