Official loan – requirements and advantages
Banks have come up with a special form of credit especially for civil servants, which can best adapt to the requirements and requirements of civil servants. Because official loans are much cheaper than other loans, those who can take them out should choose them too. However, it is always important that the providers, their services and their conditions are compared.
What is special about an official loan?
A civil servant loan is structured differently than other loans. In return, if a civil servant or a non-cancellable public worker wishes to take out such a loan, life insurance is taken out. The banks lend the money and the repayment takes place when the life insurance contract expires. During the credit period, the bank’s existing life insurance is enough to hedge the money.
The civil servant loan is only paid to eligible persons who have not yet reached the age of 60. Life insurance is taken out in the same amount as the official loan is desired, the net loan amount is taken here, which did not include the interest. So the loan is secured at all times and at all times.
The payments that the borrower has to make during the term of the loan are used on the one hand for life insurance payments and on the other hand to repay the interest on the loan. In the case of a civil servant loan, the banks rely on the civil servant to have a permanent status, the wages are always guaranteed and the pensions are also much safer than those of other employees. For this reason it is also possible that a civil servant loan has a comparatively long term. Most banks that grant these special loans require a term of 12 years.
Advantages of civil servant credit
The benefits of civil servant loans are very broad and therefore these special loans, which are offered to non-cancellable civil servants and civil servants, are more than an alternative to other loans.
A long term makes very small monthly amounts possible, so that comparatively little has to be paid each month even for relatively high loan amounts. The amount of the official loan is also not related to the other loans. It depends on the amount of income, but the loan amount can, in some cases, reach 20 times the income.
Almost all beneficiaries can get a civil servant loan if there is no negative Credit Bureau entry or there is a garnishment.
Another advantage is the life insurance for the surviving dependents of the civil servants. Should the borrower die during the term of the loan, the surviving dependents do not have to pay the loan because the entire amount is covered by life insurance.
The loan is repaid via the life insurance, which has been taken out in the exact amount. But with life insurance, interest and profit sharing accrue year after year. And when the loan has been repaid, these can be paid out to the borrowers or to the beneficiaries. Thus, the civil servant loan also ensures that capital is built up.