The question of why officials have an easier time than the average employee when they want to take out a loan is not unwarranted, but it is easy to explain. Civil servants are servants of the state, have civil servant status, which in principle makes them non-resignable, and receive a good pension even in old age. The banks like customers with a low credit risk and therefore grant loans to civil servants without providing special protection.
Past experience also proves the banks right. Civil servants are generally very reliable payers (exceptions prove the rule). Loans from civil servants almost never show payment delays and therefore do not have to be written off. As a result, civil servants are a popular clientele who have even managed to develop a loan specifically for their professional group that takes account of the facts mentioned. Official loans are loans that are only available to civil servants in this form. The maximum loan amount and the possible term differ significantly from what is otherwise known from consumer loans.
The official loan and its peculiarities
Official loans are loans / credits especially for civil servants that can be requested with a particularly high loan amount. Officials are granted a loan here, which can amount to up to 20 times the monthly net income. Anyone earning 5,000 dollars a month as an official can easily take out an official loan of 100,000 dollars without having to provide additional collateral. The terms of official loans are also long if requested. Because civil servant loans are combined with life insurance, the term begins at twelve years. But it can also be 15, 20 or 25 years. The loan itself will not be repaid during the term of the loan. The borrowers only repay the interest. A life insurance policy is then taken out in parallel to the official loan, which must be saved with a monthly savings rate during the term of the loan. The life insurance and the civil servant loan have the same term, so that the life insurance can be used to repay the loan in full.
Requirements for an official loan
If you want to take out a civil servant loan, civil servants must prove their civil servant status to the bank and have a proper Credit Bureau information. That was actually it, special collateral is not required even with large loan amounts. However, the lender expects that all current loans will be repaid with the civil servant loan, except for construction and real estate finance. Proof of the replacement must be provided.
Official Loan – Officials have a choice
But it doesn’t always have to be an official loan. It’s not worth it if you want to buy a new TV or furniture. In such cases, a normal installment loan is completely sufficient. Officials can really choose where to apply for their loan, they get the best conditions everywhere, which is particularly noticeable when it comes to loans with interest rates that depend on the credit rating. If there are people who actually get the advertised interest, it is the officials who automatically have a 1A credit rating if they can not be blamed for anything.
Alternatively, take out a loan without Credit Bureau
Officials who later want to take out a mortgage loan and / or an official loan should use a Credit Bureau-free loan for smaller purchases if they do not want to pay in cash. The loan without Credit Bureau allows civil servants to keep their Credit Bureau clean, which in the end can mean that the existing obligation does not have to be repaid, as is the case with civil servant loans. A loan without Credit Bureau can simply run alongside other lenders unnoticed.
Basically, it can be said that civil servants have a very good choice when it comes to taking out loans. Due to their status in society and their good reputation, they get loans on better terms than the normal Otto consumer.