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
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.
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.
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.