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New loan plan set to begin by Lunar New Year
A GIFT:
At 3.635 percent, the interest rate on the loan is much lower than that offered by banks. But its availability is limited to a certain group of workers
By Shih Hsiu-chuan
STAFF REPORTER
Thursday, Jan 10, 2008, Page 2
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"We hope to help laborers have a happy Lunar New Year."
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Chang Chun-hsiung, premier
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The Cabinet approved a new loan scheme yesterday that will offer 100,000 workers who were part of the labor insurance system for more than 15 years a three-year, low interest rate loan of up to NT$100,000 as part of a NT$10 billion (US$307 million) program.
Premier Chang Chun-hsiung (張俊雄) said the plan, proposed in the run-up to the Lunar New Year, aimed at preventing economically challenged workers from getting into heavy debt by borrowing money on credit cards or from underground banks.
"We hope to help laborers have a happy Lunar New Year," Chang said at a Cabinet meeting.
LOWER RATES
The interest rate on the loans will be 3.635 percent, calculated using the two-year timed deposit variable rate announced by Taiwan Post Co plus 1 percent, far lower than the interest rates for credit card borrowing and underground banks.
Borrowers who make their payments on time during the first six months will qualify for a reduction of 0.5 percent in their interest rate starting in the seventh month, the plan stipulates.
Council of Labor Affairs Chairman Lu Tien-lin (盧天麟) said the NT$10 billion for the project would come from the Labor Insurance Fund managed by the council.
At a press conference following the Cabinet meeting, Lu outlined the conditions that must be met for employees to file applications for the loans.
CONDITIONS
The loans are only available to employees who have subscribed to the labor insurance system for more than 15 years, are still insured by the system, have never been in default on insurance payments and have not received other relief loans or pensions from the insurance system.
Qualified employees can sign loan agreements with the council without being required to provide security or a guarantor from tomorrow to Jan. 25.
"The council will complete the review process and issue the loans by the Lunar New Year holiday," Lu said.
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