Loans to Public and State Employees: comparison of loans
Loans for employees are a type of personal loan intended for public and state and private employees. Loans for employees are loans that are not finalized as it is not necessary to specify the purpose of the sum requested.
The most common form of government employee loans is the assignment of one fifth of the salary. The loan installments are retained directly from the applicant’s paycheck and paid by the employer, who takes responsibility for punctuality and payment.
The amount of the deduction cannot exceed one fifth of the employee’s salary, i.e. 20% of the net paycheck. If the employer or the administrator agrees, a second retention from the paycheck is also possible, which increases the debtor’s exposure up to 40% of his salary.
What are the characteristics of public, state and private employee loans?
The characteristics of employee loans are as follows:
- maximum variable amount: depends on the age of the applicant, the duration of the loan and the salary received;
- paycheck as the only guarantee;
- loan not finalized;
- insurance policy including against employment and life risk;
- possibility of extension up to 120 months;
- possibility of early extinction;
- possibility of renewing the assignment of the fifth.
Who are the recipients?
Possible recipients of employee loans include:
- permanent workers, who are asked to demonstrate that they have been working permanently for at least three months;
- workers with training or apprenticeship contracts;
- fixed- term workers, the repayment term of the credit could be tied to the contract period;
- workers who, in the past, have had cases of insolvency or are reported as protesting subjects, since the retention from the paycheck also constitutes a sufficient guarantee for them.
The presence of the paycheck constitutes an important form of guarantee for banks and credit institutions, which therefore can use more flexible evaluation criteria in accepting loan proposals.
Loans for civil servants or state employees
For public or state employees, the DPR regulates the acceptance and disbursement of employee loans. 05/01/1950, n. 180. These workers are benefited by some special benefits and conventions, which with law 311 of 2004, have been extended, with some limitations, also to private employees.
Public employees can apply for social security Ex government agency loans, which are a good alternative to loans granted by banks or financial companies. government agency loans are the loans that the Public Administration Employee Pension Fund provides for state workers at subsidized rates and which are provided by its Credit Fund, the autonomous unitary management of credit and social benefits, or by banks and companies affiliated with the Institute.
The loans granted by social security Ex government agency are divided into:
- small INDPAP loans: they are short-term loans, granted to meet unexpected and urgent needs. They are granted quickly and without providing specific motivation or producing expenditure documentation. The amount that can be requested varies from a net monthly salary (average) up to an amount equal to four months, in the case of loans with a four-year duration;
- multi-year government agency loans: they are disbursed in response to a personal or family need proven by the applicant, such as natural disasters, fire, house purchase or move, installations of renewable energy systems or their renovation, purchase of a car, wedding, birth of children, medical treatment etc. These loans last from 5 to 10 years and enjoy an advantageous TAN;
- secured multi-year loans: they last five or ten years and the amount of the installment must be equal to one fifth of the net salary. In addition, early extinction is permitted.
Loans for private employees
Employees of private companies can also apply for loans from banks and financial companies by offering their salary as collateral. The documents required to open the preliminary investigations are:
- the CUD (Single Certification of Employee Income) model which certifies your monthly income;
- a photocopy of an identity document.
Loan solutions for private employees include:
- assignment of the fifth: a non-finalized loan, for which no reasons are requested for the request nor proof of expenditure. However, it is mandatory to take out the insurance policy, life risk and employment risk. The maximum installment applicable to the loan is one fifth of the salary and is retained directly by the employer and paid to the bank or financial company with a reduction in the risk of insolvency;
- traditional personal loans: special loans that are not directly related to the purchase of a good or service, offer higher interest rates than consumer credit products and banks require greater guarantees before providing them;
- debt consolidation: a financial product that allows all the installments of other loans in progress, disbursed both by the same bank and by different institutions, to be combined in a single monthly installment;
- loan with delegation or double fifth: allows those who already have a transfer of one fifth of the salary to increase the loan amount. The total sum of the installments must not exceed 40% of the salary.