An installment loan for civil servants, which is granted by almost every bank, is different from a consumer loan. Officials have a particular traffic jam at banks because they are almost permanent, have a relatively high and above all secure income and are not affected by unemployment.
For example, banks see a lower credit risk for civil servants than for employees in the private sector. Many credit institutions have now specialized in this group of people and specifically issue an installment loan for civil servants. Most offers are cheap because the conditions are excellent.
Installment loan for civil servants – also for employees
Even if the installment loan for civil servants is actually only intended for this group of people, employees can also get this loan. They can then apply for the loan if they have a very high income or are urban employees. The professions of the welfare associations, pension insurance or the railways are also often viewed as crisis-proof.
Conditions of the loan
Since the credit default risk is very low, the interest rates on a loan for civil servants will be very low. In addition, a very long term can be chosen and the official can also be choosy when it comes to the loan amount. The loan amount can be as many as 20 times the income and the term can last up to 20 years. This is particularly advantageous if the applicant thinks about real estate financing.
Before the loan can be drawn on, all old loans must be paid off. Either that happens before the loan is taken out or the loan amount that is taken up is used for the old loan. Otherwise the official can do whatever he wants with the money. He doesn’t have to give the bank a reason why he wants the loan.
Use installment loan as debt restructuring
If you have already taken out an expensive loan in advance, you can use the cheap installment loan for civil servants to reschedule. Since all banks have different terms, a credit comparison should be made beforehand. In this way, the new loan will definitely be cheaper than the old one and the monthly charges will be lower. The borrower should always keep an eye on the annual percentage rate, as this affects the interest rate. In addition, a special repayment should be agreed.
This means that the borrower can increase the loan amount at any time or pay off one month more than agreed. This not only has the advantage that the loan is paid off faster, it also saves interest. As soon as the installment loan has been paid off, the excess interest is paid out.
The rates should only be so high that the financial scope in the month is high enough to be able to make extra expenses. This is the only way to ensure that you do not go into debt unnecessarily and that the loan can be paid in any case.