What is special about a loan for employees?
The employee receives a fixed salary or a variable salary. In the banking industry this is not of high interest to the bank. The bank that lends the loan is also interested in whether the borrower is of legal age, creditworthy and has a regular income. Thus, the requirements for a loan for employees do not differ from other loans or loan types.
However, the credit for civil servants or civil servants has a certain special role. Often such a loan has certain special conditions , such as a cheaper interest rate, high loan amounts and a longer term. Employees can opt for an installment loan, the on-demand loan or credit, the credit line or even a credit card. This depends on the individual loan amount, which should be available.
What requirements must be met for a loan?
In principle, every employee can take out a loan. Since every employee is financially well positioned, he has the widest choice in the credit market. Many banks offer employees an outright loan, installment loan or on-call loan. This is adapted to the respective needs. Other prerequisites for taking such a loan would be that you can provide salary certificates and that you are no longer in the probationary period as an employee. This serves as a hedge for the banks. Also, the main residence must be in Germany and a German bank account must exist.
Employees and civil servants are highly valued by banks as credit customers. They provide a high income and a tremendous amount of security for keeping the employment . Accordingly, this group of people fulfills perfectly the conditions for a loan. Since these customers are highly valued, many banks offer loans tailored to this group of people. These customers have a high credit rating. As a result, interest rates are usually lower than other loans. Since the creditworthiness of many employees is assumed, a abfrage is often not necessary for these customers.
Due to the secure employment relationship, a repayment term of up to 20 years is not uncommon. Often, the credit can be linked with such a term equal to a favorable endowment life insurance . Instead of the installment repayment, the monthly payment into the life insurance takes place here. The marital status of the employee plays no role in the award. Married employees, however, can further exploit the scope of the loan. A guarantor is usually not required for an employee.
What loan for what?
A credit line is suitable for offsetting the current account balance. If one stands there in the minus, the interest rates are disproportionately high. A installment loan is the better alternative. A installment loan is the oldest form of credit. They get a sum of X and have these usually at leisure . Now, fixed installments are paid over a certain period.
In the call-off loan, the borrower, as the name implies, has the money on call at the amount of a pre-determined loan amount. This loan is characterized by high flexibility. There is no fixed term and there is only interest on the amount that was actually used.
No matter what purpose a loan is required for, the borrower must always meet certain requirements. This applies to employees in employment as well as those who are employed. Although self-employed and freelancers are subject to different conditions, one thing is equally important for borrowers – they all have to have a good credit rating.
Creditworthiness of employees
But what is creditworthiness and how is it defined? First, credit seekers must have a good information. The “General Collateral Association” collects the data from anyone who has taken up or applied for a loan, a mobile phone contract, auto finance or other loans. This determines to what extent the borrower has complied with his payments on a regular basis.
At the end of this financial analysis, a so-called score is determined, which states the creditworthiness of the future borrower. In some cases this is also referred to as a risk-adjusted interest rate system. Banks, for example, award loans to employees at lower or higher interest rates, depending on their personal score. However, looking at job status on its own is no longer so relevant to lending and the associated interest rate than was the case a few years and decades ago.
Nonetheless, in some cases, employees may be given a special position, for example, if they work in the civil service. Anyone who is not sure about his assessment at the , incidentally, can draw there “own information”. Online, you can call up your personal data for a certain fee directly from .
Collateral for the loan
These criteria apply to almost all banks and are also binding on almost all types of home loans. However, it is different for real estate loans for employees, these are subject to similar conditions in terms of creditworthiness, but here also serves the house or condominium to be financed as a basis for consideration in lending. Because the real estate is used as security and in the land register of the object a mortgage is registered in favor of the lender.
Of course, in the case of an investment such as the purchase of a property, of course many questions must first be answered, which logically also apply to a loan for employees. One of them is the “what can I afford” question. Because depending on the purchase price of the object to be acquired, a corresponding monthly rate must be applied. And the higher the price, the higher the amount due for the loan installment every month. Therefore, anyone looking for home ownership should first undertake a thorough financial review of their personal financial situation.
The own consideration of the financial situation does not necessarily fulfill that of the financing bank. Because the so-called cost of living are measured by the credit departments according to their own guidelines. However, they also differ from bank to bank – but very often differ from the ideas borrowers have of their own cost of living situation.
As soon as it has been clarified what the financing amount should be and the credit negotiations with the bank have progressed so far that the credit is judged to be feasible, the question arises as to the appropriate form of financing. If it is more about an annuity loan: Here, interest and principal payments are paid in one installment. Where the continuously saved interest rates are attributed to the rate of repayment. For the most part, the monthly installment consists of interest, and then the repayment portion outweighs the end of the loan.
Another possible financing option consists in a repayable loan, also called repayment mortgage. Here, the interest on the loan is shown separately and paid, the repayment then runs mostly in a home savings contract – formerly life insurance were used as a repayment installment.
After expiry of the interest fixing period of the loan, this should be replaced by the accumulated until then credit, together with the existing loan entitlement of Bauspar contract. Provided the savings rate (Tilgunsersatzrate) for the Bausparvertrag was calculated correctly.
Purpose of the loan
If it is not a real estate but a personal loan for employees, the procedure is much simpler. After a successful credit check and the signing of the loan agreement, the bank pays the loan out to the borrower in a timely manner. In this case, the capital thus available can generally be used for free use. In the case of special car loans, in some cases, the financing bank reserves the right to retain the vehicle registration document as collateral.
However, what a borrower should definitely do before taking out a loan is a comprehensive credit comparison. This applies to personal loans, loans without , loans for employees or for mortgage loans alike.
Today, many online portals offer a free credit comparison. So interested parties can first inform in detail and then even request the cheapest loan provider their desired loan.
Requirements for the employee loan
Another relatively important requirement for easily taking out a loan – especially a real estate loan – is a certain amount of equity capital. Therefore, especially when it comes to the construction of new houses or the purchase of a property, always something savings can be brought into the financing. Although loans for employees are possible even without equity, the more money is available, however, the cheaper the interest.
All employees employed in the civil service are also very well placed to obtain a particularly favorable loan. Here, great wishes can be met with small installments. First-class conditions and high flexibility are the characteristics. Basically, you should make sure that at larger mortgage loans at any time free special repayments are possible. Likewise, borrowers should be careful to ensure that the terms and conditions of the monthly installments are reflected in credit conditions.
In any case, in the case of loans for civil servants, workers who have been working for a long time have fair interest rates and an attractive effective interest rate.
Replacing expensive loans
Furthermore, the combination of expensive installment loans plays an important role in employee loans. Thus, for example, disbursements can be replaced extremely cheaply and loans at other banks can be combined in a new, very favorable loan.
Anyone who is looking for a loan as an employee usually has quite good cards in terms of interest rates. Likewise, real estate loans with high total are relatively long-term financing. Often even fixed interest rates are offered over the entire term. Of course, the other credit conditions for employees are quite attractive. Thus, repayments and other important credit components can be tailored exactly to your personal living conditions.
For example, special repayments are always interesting when an inheritance or other large capital inflow flows from a third party and the loan amount can be reduced in this way. In this case, you can choose whether you want a shorter duration or if you want to reduce the monthly loan installment.