Early debt repayment: a good option for indebted civil servants? – Credit Consolidation

An early repayment is a payment to settle part or all of a debt before a due date. As soon as a civil servant borrower has several loans, this option can be considered. However, is prepayment beneficial to public service borrowers?


Early repayment: the principle

debt repayment

Early repayment allows a borrower to be able to repay part or all of a debt before the scheduled date. This repayment becomes total if the borrower can and decides to settle the loan completely, or it will be partial if it concerns only a part of the sums remaining due.

However, early repayment may generate costs on the part of the creditor called PRA (Early Redemption Penalty) in order to make up for the shortfall in interest which will not be collected, fixed in advance in the consumer loan contract and supervised by the law according to article L311-29 of the consumer code.

However, the lender can refuse an early repayment if it is less than a certain amount, fixed by decree beforehand and cannot exceed 3 times the amount of the due date to come.

Regarding mortgages, repayment penalties are also present. The conditions are set out in articles of law L312-21 and R312-2. These penalties cannot exceed 6 months of interest from the sums reimbursed at the loan rate, and cannot exceed 3% of the principal remaining due.

It is worth remembering that these sums are not imposed by the creditor but by the legislator, it is therefore quite possible to negotiate his prepayment costs with his banker when taking out the loan.


Advance repayment: the benefits for civil servants

debt repayment

The benefits to an official borrower to make prepayments are many.

Following the sale of property, consolidation of credit or a home money, the borrower can decide to make an advance payment to reduce the repayment term and ultimately pay less interest.

However, for early repayment on a mortgage, the borrower official must first perform a simulation to deduce whether this operation will be profitable.

If this repayment is partial, the creditor can make this operation free if it is included in the loan contract, enough to save a significant sum to a borrower from the public service.

Therefore, the prepayment of credit can be beneficial for any borrower wishing to optimize its financing, including indebted civil servants. However, caution should be exercised, since this option generates costs.

Loan without a fixed employment contract.

It is not easy for people with a permanent contract to get a cheap loan. It gets even harder for people who don’t have a fixed contract with an employer. However, many people, including those with higher incomes and senior positions, do not have a permanent employment contract these days. The employment relationship is often only temporary. This is common practice for researchers or workers in production.

Fixed employment contract – usually a prerequisite for a loan

Fixed employment contract - usually a prerequisite for a loan

The basic requirement for a loan is, at least at a reputable bank, a fixed income. Because anyone who applies for a loan must be able to pay the installments with future income. What also goes through if you want to take out a loan from a bank is, for example, an employment contract limited to two years as security.

However, the loan term must then be a maximum of two years and the borrowed capital and interest must have been paid back by then. In addition to this alternative, there are still options to get a loan without a fixed employment contract: Life insurance, for example, is a security for repayment. However, with such a secured loan, it is a prerequisite that the Credit Bureau query is positive.

More collateral

More collateral

Ordering a guarantor is also an option to get a loan without a fixed employment contract. The joint and several guarantor is particularly popular because the bank can immediately hold the guarantor harmless if the principal is in arrears without first complaining to the borrower and having him executed.

A case example of a guarantee for a loan without a fixed employment contract is when the earning husband vouches for his wife. Collateral such as land or a home is also welcome at the bank. In the case of real estate, an attachment can be made if the loan debt is not paid.

Private donors

Private donors

In addition to the possibility of contacting acquaintances or the family in order to receive money, there is also the possibility of contacting private individuals who, for example, hide money via the Internet without Credit Bureau query and without asking about income. However, these loan sharks often demand high commissions that border on usury and the interest rates are usually high. A consultation at the consumer advice center will remedy the prospect of a loan without a fixed employment contract.

It should not be forgotten that a credit commitment consumes money that can only be achieved in the future. An employment contract is therefore important to build on. But what must also be considered is that a permanent employment relationship does not have to be a 100% guarantee for a loan repayment – downsizing and dismissal can affect everyone.

Instant credit with no credit rating.

An instant credit with no credit rating is generally not available from any conventional bank or savings bank. If you are still interested in such a loan, you have to look carefully for alternatives. Since the demand has increased significantly in recent years, more and more credit institutions are now offering an instant credit with no credit rating. The best way to find a suitable offer is to find it on the Internet.



Instant credit with no credit doesn’t mean that you don’t need any collateral at all. Any reputable lender will only grant you a loan if you can be sure that you will likely be able to meet your payment obligations and repay your loan installments in full and on time. If there is even the slightest doubt, your loan application will always be rejected.

In the case of an instant loan without creditworthiness, the lender generally refrains from obtaining your Credit Bureau information. This forces him to protect himself elsewhere. The basic requirements for an instant loan without creditworthiness cannot be generalized. In principle, every provider has the opportunity to determine his own credit terms. In most cases, however, it will only be possible for employees to get an instant credit with no credit rating, as the regular monthly income serves as security for the lender. This income should also be high enough, otherwise there may be problems with the repayment of the loan.

Application, approval and repayment

Application, approval and repayment

There are numerous providers of instant credit without creditworthiness on the Internet who advertise their offers more or less intensively. For this reason, it is always advisable to make a comparison before deciding on a particular loan. You should not only pay attention to the loan interest due and the monthly loan installments, but also make inquiries as to whether and to what extent processing or agency fees are due. If you have found the right offer, you can apply for your desired loan immediately. If all the necessary documents are available, the provider will usually decide very quickly. This process usually only takes a few hours. If the instant credit without creditworthiness is approved, it will be transferred to your account immediately and must then be repaid in constant monthly installments.

Most represented government loans

The federal government provides financial assistance in certain circumstances, but learning about and benefiting from these programs can be difficult.

In some cases, the government does not lend money directly. Instead, loans are offered by borrowers (such as banks and financial companies) and supported by the US government: the government promises to repay if you, the borrower, do not.

This guarantee reduces the risk for lenders and makes them more willing to lend at attractive rates, and they are willing to lend in situations where you may not qualify for a loan.

There are several types of credit, and new programs occasionally come in response to events such as environmental disasters and other crises. The most common types of loans are:

  • Student loans
  • Housing loans, including disasters and home improvement loans
  • Business loans, including farms and ranches

Educational loans


If you need help paying for school, federal student loans (under the Direct Loan program) are probably the best option. They are easy to qualify for, have competitive rates and provide flexibility when you get on your feet (and when you hit the occasional speed in life).

For example, during the unemployment period, you may be able to skip your loan payments temporarily. You can also reduce the required loan payment to make it affordable (given the income level).

When borrowing for education, it is almost always wise to borrow as much as you can from government programs before reaching out to private lenders.

Private lenders may also offer feature borrowers, but they are far less generous than government loans. They often have variable rates and are harder to qualify for (you will need good credit or a cosigner).

Government loans for housing


The federal government encourages homeownership. There is certainly some debate on this topic, but the justification is that homeowners have the opportunity to build equity in their homes and improve their standard of living. They are involved in the community, take care of their properties and enjoy a sense of control over their living environment.

Homebuyer programs for the first time

They help people get into homeownership. They can be offered through federal or local government programs, as well as some nonprofit organizations.

Features typically include payment assistance or low-interest rates. However, these programs are not free for everyone. Borrowers are usually limited to specific incomes, and there may be limits to how much you can get from increasing the value of your home.

FHA loans
They are among the most popular options for borrowers looking to reduce their payments. You can only put in 3.5%, and it’s easier to use gifts and concessions to cover closing costs.

However, you will have to pay an additional insurance premium over a long period of time, which may not work in your favor. Read more about how FHA loans work.

Refinancing programs
The mortgage crisis is behind us, but some have not yet recovered. Other, local factors can also lead to home value. If you are unable to refinance (because you are underwater, for example), there are still several mortgage assistance programs available.

Other programs
Several other less popular loan programs are supported by government or government agencies. For example, VA loans are available to officers and veterans, and USDA loans offer up to 100% financing for specific borrowers in rural areas.

Home improvement and repair
If you own a home that needs repair (or buy one), the government is willing to help keep your home and neighborhood a clean, safe and well-lit place.

FHA 203 (k) loans provide funds for the purchase or rehabilitation of a home. Following the disaster, the US Small Business Administration (SBA) provides funding to repair your main residence and replace certain items. Even though the loan is SBA, you do not need to own the business.

In addition to supporting loans, the government also offers programs that can help you reduce the amount you have borrowed. Civil servants such as law enforcement officials, teachers, firefighters, and EMTs can also benefit from the Good Neighbor Next Door program.

Green projects
Local authorities can also provide programs that help improve energy efficiency. PACE programs provide money for projects such as solar installations, sustainable appliances and more.

Business loans


On the rise of the boating tide: small businesses are opening jobs for people in the community and generating tax revenue for local and federal governments.

If you need help getting started or growing your venture, buy government loans first. SBA loans should be your first choice, and they are available at many local banks and credit unions.

While the government helps by guaranteeing credit, you will also need to put some skin in the game. Be prepared to make a personal guarantee on most of the business loans you apply for.

SBA 7 (a) Small Business Loan is the most popular loan program, providing $ 2 million. Other loans are available for small businesses. In particular, the SBA promotes micrology programs to help small businesses and nonprofits expand.

Personal loans


The federal government does not offer (or guarantee) personal unsecured loans. Loan programs tend to serve a specific purpose, such as financing your education, starting and developing a business, or promoting safe and well-maintained housing.

It is harder to influence how money is spent with personal credit, so the policy is less likely to trigger that type of debt. Your best options for personal credit are:

  • Visit your local bank or credit union and apply for a loan
  • Try a reputable online lender or P2P lending service

Since there is no government guarantee for this debt, you may have a harder time getting approved: you need decent credit and sufficient income to qualify for a loan. If you have trouble getting approved, you may need to pledge collateral or ask someone to exchange a loan for you.

Instant credit from private individuals

Borrowing money from private individuals has a long tradition. People have always borrowed money from family or friends on the one hand because they would not be able to get any money from the bank due to the lack of collateral, but mostly to save the cost of bank loans.

Old principle in modern times

Old principle in modern times

This principle has been expanded further in recent years with the help of the Internet. This makes it possible to get instant credit from private individuals with processing fees and interest rates that are significantly lower than those of other credit institutions. With this method of borrowing, some of the money is available more quickly than at banks, since the processing times are shorter.
In order to get instant credit from private individuals, you should have sufficient creditworthiness. With a negative Credit Bureau entry you should look around for another possibility.

Both sides win

Both sides win

With an instant loan from private individuals, not only the borrower has advantages. If you are one of those people who have money left over, the principle of an instant personal loan is an interesting way to invest money. If you make your money available to someone other than credit, you can get much better interest than if you put the money in a bank. Borrowers have the opportunity to get a loan on good terms quickly and easily. So it is also worth considering whether you should not replace an expensive overdraft facility or reschedule an expensive loan from a bank with an instant loan from private individuals.

Instant credit from private individuals- how does it work?

Instant credit from private individuals- how does it work?

The minimum age for both people who lend money and those who lend money is 18. Both must have an account with a bank. If someone wants to borrow money, their creditworthiness is first checked. In addition, the income must be specified so that repayment can be guaranteed. Then the application is published with a description. Those who want to lend money can look at the credit requests and then decide which project they want to donate their money to. With this principle, both sides have financial advantages and you can also do something good with your money as a lender.

Debts and mental health

In the case that we have just described, we can see how money can generate pleasant or unpleasant emotions, depending on whether or not it is available. But this happens at different scales, since nobody is immune to the state of their finances affecting them in aspects of their daily lives that are not directly related to the economic.

A 2016 study called Money on your mind , which consisted of surveying 5,500 people and asking them about their debts and mental health, showed that 86% of respondents said their financial situation made their mental health worse. Similarly, 72% indicated that, on the contrary, their mental health problems caused their financial situation to become even more serious.

Although to say that money gives happiness is a banal assertion, if we think about the well-being, tranquility and security that healthy finances offer us, then it makes sense. In the same way, not having this resource generates frustration because of the impossibility of covering basic needs, as well as leisure and social expenses.

How to know if your debts are affecting your mental health?

How to know if your debts are affecting your mental health?

A complicated financial situation can cause problems of stress, anxiety and depression. We have even heard of cases where people have thought about ending their lives as a solution to the debt problem. Remember that depression is generated by focusing too much on a single problem without the possibility of finding a true solution or having clarity of the situation.

Isolation is another way of manifesting a complicated condition. People who are in a vulnerable economic situation tend to avoid meetings with friends or family because they feel ashamed, they prefer to avoid the issue by stopping attending events that somehow make them face their reality, causing them greater discomfort.

While the aforementioned studies indicate that having no money affects the physical and mental health of people, these consequences also affect the ability of people to maintain a healthy financial life.

Working to prevent both is a great responsibility. But when the situation becomes present, the important thing is to seek help as soon as possible . It can be a psychologist, a psychiatrist or therapist with whom you work together to glimpse the problem and find tools to deal with it better.

At the same time, you can seek financial advice to solve your debt problem. Sometimes, the education of our finances is not a concern until we are immersed in a problem caused in large part by a bad administration. Therefore, having the opinion of expert advisors can be a great step. In the same way, you will not face only that complicated process that is to leave debts aside.

Once you have addressed the situation, both personal and financial, the most important thing is that you do not stop doing things that make you feel better. Exercising, hanging out with your friends or family, can help release stress and anxiety. You can also look for activities that represent extra income or work on a project to take care of and improve your financial situation .

Debt and mental health recommendations

Debt and mental health recommendations

  • Good financial planning helps to be clear and feel better about your finances (regardless of whether or not you are in debt).
  • Avoiding the problem will only make the situation worse. You could be vulnerable to fall into addictive attitudes or acquire vices that only harm your life and those around you more.
  • It is best to receive financial advice to know the solutions you can find to your debt situation.
  • Seek psychological help. If the situation has already reached a level where you keep thinking about it and disable you to find a solution .
  • Share what you think and feel with trusted people , this will make you feel better and you will probably realize that there are other individuals who are in the same situation.
  • Do not use the money to feel better. In the same study of money on your mind , 93% of the participants responded that they spend more when they feel bad. They take credits or cards they don’t want or need or buy goods and services they can’t afford, generating guilt and anxiety.
  • Your physical and mental health are your responsibility , take control of both and seek help. It’s hard to find a solution when you’re just fighting it.