Are you considering loans for public employees? Then you are spoiled for choice. You could, for example, opt for a loan to the official tariff. Then you talk to a bank or insurance. You can also use loan offers to all citizens. The bottom line is that your loan should eventually be low interest.
Loans for civil servants – a lot of love
Not infrequently, borrowers are not quite sure whether the bank or an insurance company welcomes their loan request or not. Loans for public sector employees are popular with potential lenders. The reputation of an indefinite employee in the state is about comparable to that of an official. Basically, lending is considered a safe investment. Similarly, the credit bureaux judge it. Employees in the public sector, the “credit guards” to an above-average credit rating.
In other words, as with the official, the employer provides for a secure income environment. He pays much more punctually than private companies. The income for state employees is also quite high by comparison. The most important thing, however, is job security. Although long-term employees are generally terminable, they usually remain employed until retirement.
Prepare credit – what is important?
There is no good or bad credit. Because, loans should be appropriate. Of course, also low-interest and adapted to personal needs. From the point of view of credit costs, personal creditworthiness is important.
With a very good credit rating, the “Zinspoker” pays off with a “credit-based” interest rate. For a rather average credit rating, it is usually a loan for the “credit rating-independent” fixed interest rate. It is not difficult to assess your own credit rating correctly. A free self-assessment admits the Credit Bureau each citizen annually.
It contains everything that the bank will later use as a basis for decision-making. The data then makes it easy to assess yourself correctly. This clarifies the question of the interest rate model and possibly also of the provider. Loans for public sector employees with excellent credit lead to offers with “real interest rates”. However, if the rating turns towards “weak B”, then it will be more of a private loan.
Plan the duration – how long to pay off?
Basically, every loan should be paid back as soon as possible. There are indications for the right duration. Because, ultimately, the rate determines how long it takes to complete the loan. The maximum installment height shows the surplus calculation. Only the actual budget surplus is actually available for installment payments. With a small loan, 1000 USD to 3000 USD, the monthly rate may approach the limit.
But long-term loans for public sector employees are different. In this case, the household budget must keep reserves.
Otherwise she can no longer fulfill her usual tasks, for example paying an unexpectedly high bill.
Compare offers and providers
No credit comparison can take into account all “potential offers for loans”. Otherwise every “pawn shop”, every “life insurance”, every “loan broker” and many others would have to be recorded. Below the engraving would then be a comparison, through which no one passes. A “rough preselection” between “bank credit” and “insurance credit” must therefore be taken by the borrower himself.
Attached to this page is a comparison for loans from banks and loans from private investors. Nevertheless, below a few words about the classic civil service loan.
Is a civil service loan still worth it?
Long-term loans for public sector employees automatically recall reminders of an official’s loan from an insurance company. Even the term “civil service loan” is attributed to insurance companies. It used to be a good bet to include long-term loans as end-of-life loans over life insurance. Only the contributions and interest were paid.
Thus, the current rate was small. At the due date, the “insurance payment” compensated the loan. In addition, borrowers were allowed to look forward to the profit distribution. In retrospect, therefore, there was even money back on the loan for public sector employees.
Unfortunately, these good times are over. In the meantime, Vater Staat has discovered the “capital-forming life insurance” as a source of income. In addition, thanks to low key interest rates, the chances of making a profit through the profit participation have also disappeared. Unfortunately, this is not a good tip today.
Credit for the B-tariff – still the top offer?
Almost legendary is the reputation of loans for public employees to the B-tariff. For, after all, house banks granted their most favorable credit for decades at this rate. As a result, employees of the public service are still looking for it. Just as in the past, it is no longer synonymous with this interest rate offer.
The score takes into account the benefits of an employment relationship with the state. Although some banks still advertise with the B-rate, it is no longer automatically the cheapest loan.
Proof of this is provided immediately by the credit comparison.
Credit example – B-rate versus interest rate offer for ordinary citizens
If, for example, $ 15,000 in public sector employees’ loans were taken up by the ABK, it would be at the B rate. This is shown by the example according to PAngV, 4.95 percent annual percentage rate. Now look at loan offers for everyone. Again compared to PAngV – 15000 USD credit is 60 months maturity.
For Santander Bank calculated only 2.69 percent APR. The bottom line is the Santander credit in direct comparison 883.52 USD cheaper.
Temporary in public service – problem?
A major problem of our time are employment contracts with a time limit. Unfortunately, it is the public employers who make shameless use of time limits. From one temporary contract to the next, many employees of the public service “get lost”. A nice example of this comes from the TV. In the case shown was the example of a woman. After all, she was employed by the employment office for a limited period of 18 years.
Only for 6 months, then for a year, but never indefinite. Of course, loans for public sector employees are not secure against this background. All banks will respond distantly. You are required to check the creditworthiness. The audit must always certify a secure lending.
Credit is guaranteed only on a fixed-term contract if the loan is settled before the expiration of the time limit.
Problem Solving – Personal Credit
To secure the loan, a second, solvent borrower may enter into liability. Likewise, a valuable security of security for securing credit would be conceivable. With this, all doors of the banks are open again. In addition, portals such as Auxmoney and Astro Finance offer personal loans to public sector employees. Unlike the bank, a private investor is not required by law to conduct a credit check. Basically, private lenders are allowed to take unlimited risks.
The bottom line is that the loan costs more than a well secured bank loan.