Salary certificate is an essential document for working employees to be used for availing financial assistance from Banks. When employee approaches a bank for car loan or housing loan, bank first inquire about repayment capacity of borrower. The best source bank rely on Salary certificate, issued by head of the department the employee works.
After completing probation period, employee gets confirmation which will give pleasure and happiness to the life. The next step thinking to enhance life by adding facilities. It may be a new car or a new house or home appliances like home theater or something else. In normal case, most of the employees depend bank loan to meet their shortfalls of fund. Before going to bank for applying loan, following 6 important things to be checked whether you have met those points speeding up loan process:
Salaried employees must know the differences between Salary certificate and Salary letter. In most cases, salary certificate or salary letter come into picture when an employee thinks about how to overcome current or forthcoming financial crisis - personal debt, purchasing a car, buying a house are the common occasions.
When you contact a financial institutions like bank, they give you a list of documents required for processing loan application. Some institution wanted salary certificate while others wanted salary letter. What are the main objectives and differences of these two documents - salary certificate and salary letter?
What is Salary Certificate?
Salary certificate is a document issued by an office head to their employee upon request made by an employee. The request must have a reason which should mention in the certificate as to own purpose or relatives' / friend's purpose. If approved by management, a certificate will be issued to employee in the subject line of "Salary Certificate". This certificate can be submitted for Loan application to any financial institutions depending upon the relationship and interest. Usually its validity may remain for one year or less.
Once you feel that your job is secure and it gives financial stability and security, the next step you may think to enhance life style further high. Probably the chances are either want to buy a new car or want to construct new house or sometimes, want to have some good furniture and home appliances to your house. Whatever, you need money or financial assistance from a reliable institution like banks.
Answer: Normally an employee is entitled to get Salary certificate once in a year. In some organization, it will be given upto 4 in each quarter year gap. It depends the policy of the company / organization, nothing else. Many financial institutions accepts Salary slip instead of Salary Certificate as a supporting document for loan application. In such cases employee can apply for 12 loan applications! This does not mean that employee will get loans from all those institutions.
In most of the cases salary certificate issues without a format. Salary Certificate letter must contain some necessary information related to an employee's salary break-up including the tenure. Generally, Salary certificate uses for submitting to financial institutions sanctioning loan request made by salaried employee. It will give a basic assessment of an employee's repayment capacity prior sanctioning loan amount.