Public employee personal loans
Public employees have always been considered an advantageous category in accessing credit because they can apply for social security ex government agency loans at a subsidized rate. However, access to social security loans is not the only advantage deriving from an employment contract in a public body, a factor that allows you to easily obtain public employee loans even without resorting to social security agreements.
When looking for a loan, the first thing to consider is the collateral you are able to offer. The paycheck is undoubtedly the most accepted form of guarantee from banks and finance and allows you to easily obtain personal loans even for rather high amounts.
Temporary and permanent public employee loans
As for personal loans, however, it is good to remember that even if the applicant has a regular employment contract, the bank can request the signature of a guarantor who in turn undertakes to guarantee the repayment of the loan in the event of insolvency. by the debtor.
This is a fairly common practice, especially when applying for a loan with a very large amount or if the applicant can boast a fairly recent working seniority. In any case, it is not possible to establish rules valid a priori, since the request for any additional guarantees is at the discretion of the individual credit institution.
Alternatively, many banks and financial companies request, in order to mitigate the risk of insolvency, the signing of an insurance policy, which usually covers the repayment of the loan in the event that the applicant loses his job or dies before the complete extinction of the debt.
However, often these insurances have a not insignificant cost which will weigh on the APR applied to the loan, leading to an increase in the amortization rate. In fact, it is very important to take into account the impact that the insurance will have on financing before signing the contract.
Being holders of a paycheck, and in most cases also of an open-ended contract, state employees can also opt for government employees on the assignment of a fifth of their salary.
Public Employee Loans Assignment Fifth : What They Are and How to Get Them
The assignment of the fifth is a particular type of personal loan that stands out for simplicity and convenience since it provides for the repayment of the capital granted through a repayment plan in constant installments deducted directly from the applicant’s salary. The interest rate is always fixed and the payments are monthly.
As already mentioned, the repayment of the installments takes place by reducing the installment from the salary by the employer, who in fact undertakes to deduct the amount of the payment from the employee’s paycheck every month and pay it to the bank providing the loan.
As the name suggests, the assignment of the fifth provides for an installment which cannot exceed the fifth part of the monthly net salary received by the applicant. The duration of the loan cannot exceed 10 years.
For the law, at the same time as the subscription of the loan on the sale of the fifth, it is also foreseen the stipulation of an insurance against life and employment risks. In the event that an employee hired on a fixed-term contract applies for the loan, a minimum length of work is also required, which varies according to the company providing the policy.
As a rule, the applicant ‘s employer company must also meet certain eligibility criteria, such as a share capital in excess of a certain sum or a minimum number of employees. Features that vary according to the requests set by the insurance company. However, for public sector loans this type of verification is not necessary.