It is possible to obtain a loan with a fixed-term employment contract but with limitations on duration and amount disbursed. Additional guarantees may be required.
Getting a loan when working with a fixed-term contract is not simple , the amounts that can be obtained are limited and often collateral guarantees are required.
Beyond, therefore, as elusive as fabulous advertising offers, in order to be able to get financed with the fixed-term contract, it will be necessary to balance the duration of the repayment plan with the availability or otherwise of ancillary guarantees and finally with an adequate reasoning on the amount that will be required .
It is therefore clear that three factors such as the ones indicated (duration, guarantee and sufficient amount requested to our fees) are not simple to manage and therefore we do not expect any financial company to be waiting for us to be employees with permanent contracts, perhaps in the public, and willing to make a fifth sale (guaranteed loan par excellence)!
The duration of a loan with a fixed-term contract
The first node that we face is the duration, understood as the number of installments and therefore of the months that the loan can last.
The financial companies try to provide with durations that are at most equal to the residual duration of the employment contract. Example: you have a 36 month contract and it is about halfway through; well, the financial one will provide a maximum of 18 months to try to guarantee the coverage of all the installments , considering that during these 18 months the debiotre will receive an income.
This is the general rule, but there may be exceptions: some financial institutions accept an encroachment beyond the residual period of work, even reaching double status.
In the previous case, a 36-month loan could be obtained. At the time of writing this article Fiditalia, for example, does this type of operation.
Probably to access this “overrun” additional guarantees will be requested, as we shall see the relative paragraph.
In assessing the duration, a factor analogous to that always taken into consideration for new hires (Newly hired loans, necessary precautions to avoid easy illusions): for this last category a certain length of service is required, often twelve months. Now, if you have a twelve-month fixed-term contract, it is here that if this factor of seniority affects in equal measure it would be impossible to obtain a loan. Here, too, perhaps the financial institutions derogate at least in part from this type of limitation, but it is really unlikely to be financed when they have been hired for less than 3-4 months and in any case it is good to prepare, again, for the request for ancillary guarantees.
Maximum amount obtainable in the loan with a fixed-term contract, difficult to go beyond 5,000 euros
The maximum amount obtainable, in any type of loan, is determined by the duration and amount of the installment . For a complete discussion, read How much can I get? The maximum amount of a loan, how to understand your limit.
In our case, therefore, we will have a fairly short duration, hardly exceeding 24 months.
The amount of the installment depends on income, and in principle the first must be at most 20% of the second.
Since the two factors are variable, it is not possible (nor serious) to state ‘maximum limits’ that can be reached: each applicant has his salary, his seniority of service and his remaining term.
Generally, however, we can say that the amounts are less than 5,000 euros, as shown by a rather crude calculation: the average salary of this type of workers is often below 1,000 euros, with a maximum sustainable installment of about 200 euros. Even if the residual duration is high, we assume 24 months, the maximum amount obtainable will be around 4,200 – 4,300 euros.
ancillary guarantees, the key to success Given what has been said so far, it is clear that the condition of those requesting a loan with a fixed-term contract is one of weakness .
In such cases having an ancillary guarantee can really make the difference, and the typical guarantee in these cases is a guarantor (we talked about it here The guarantor of a loan: clarifications about the role of this figure).
These can allow us to act in our favor on the limits discussed so far , and in particular:
– the duration, allowing us to exceed the residual duration of the employment contract, because the financial institution has those who pay the installments even when the principal debtor loses the income and could remain unemployed
– the installment in 20%, making it possible to reach higher percentages (25% or more rarely even 30%), resulting in a higher maximum obtainable amount. In the reality of things, however, even if it remains within the terms previously indicated and for which the figure of the guarantor would not be necessary, well some financial companies impose it anyway to protect themselves more. It is their right and therefore also to prepare for this eventuality.