The list of things to evaluate before applying for a loan

Loans represent an interesting solution to cope with sudden or substantial expenditure, because they allow you to dilute over time the payment of a sum of money that would otherwise weigh on the family budget.

However, you must always be very careful to evaluate well, reading every note of the loan agreement to try to understand if you are running into too high rates or commitments from which it will be difficult to free yourself.

There are however some general rules to follow, let’s see them here.

 

Personal or finalized loan?

Personal loan?

There is a substantial difference between the two loan formulas.

The finalized loan is a loan generally obtained from a reseller of goods or services. The disbursement of the amount is made in favor of the operator who sells the good or service, while the customer will have to sign two different contracts: one for purchase with the retailer and one for financing with the financial company.

The cons of the finalized loan are related to the fact that the consumer has no possibility of choosing or customizing the conditions , but will have to submit to those established by the loan connected to the purchased good or service. Watch out for further costs, before making a purchase in installments it is good to inquire about offers.

The personal loan takes place at a bank or financial institution. The amount is paid directly to the applicant, who will be free to dispose of it at his discretion, without providing a specific reason. It will also be possible to establish special conditions by contracting them with the credit institution, without having to specify, among other things, the purpose of the request.

 

What is the purpose of the loan?

Although there is no obligation for the applicant to specify the purpose of the loan, it is always better to declare it, since requesting a generic liquidity loan, without any asset to guarantee the credit granted, involves higher interest rates.

 

Watch out for costs

credit loan

The loans are not all the same, because they do not follow the market indices and have a cost that depends very much on the intermediary, who will define the interest rate, the repayment conditions, methods and timing of disbursement, any compensation for early repayment : just know that in the event of early repayment of a loan, any penalties cannot exceed 1% of the amount financed if the residual life of the contract exceeds one year.

 

Taeg is more important than Tan

When asking for the conditions of the loan, it is necessary to dwell first of all on the APR (Annual Effective Global Interest Rate): it is this value that more than anything else allows you to evaluate its convenience. In fact, if the Tan is only the annual interest rate applied on the financed capital, the Taeg is the indicator as a percentage of the overall cost of the loan, because it includes the expenses incurred by the bank or financial intermediary for opening and managing financing.

 

Are you sure you have chosen the best loan?

What is the purpose of the loan?

The rule not to make mistakes is to compare the proposals on the market, because it is not easy to find the cheapest loan. For this reason it is worth getting help from a comparator, who in a few minutes is able to provide the best personal loan for each different applicant profile. Lite Lenders Credit does it in a professional, competent and completely free way.

 

Let’s take an example

For example, if we simulate the request for a liquidity loan of 10,000 dollars for a duration of 84 months on November 22, in the province of Milan the most convenient solution will be that offered by Younited. Personal Loan has a monthly payment of 147.47 dollars, with a Tan of 4.54% and a Taeg of 6.47%.

The initial expenses are for 593.22 dollars, the other expenses are zero. The amount will be paid by bank transfer to the bank account indicated by the applicant, at the latest within the fifteenth day following the communication of confirmation of the granting of the credit.

Loan with Government Agency agreement for civil servants

If you are a civil servant and need more liquidity, the solution to your problems could be an Social Welfare exGovernment Agency loan. If you meet the required requirements, you will be able to access loans that vary in amount and duration depending on your area of ​​use or the reasons for the request. In this article I will show you all the possibilities offered by Social Welfare, the requirements, the request methods and the delivery times.

What are loans at subsidized rates

What are loans at subsidized rates

These are loans at subsidized rates that can be disbursed to civil servants (also retired) either directly from the Social Welfare from the Credit Fund, or from banks and financial institutions affiliated with the guarantee of the Social Welfare Fund.

This Credit Fund is fed by the contribution rate paid by employees of the companies of the Poste Italiane SpA Group, by retired employees and former civil servants registered in the Unitary management of credit and social benefits, or by the Magistral Assistance Management.

They can be both small short-term personal loans, which can be used at the discretion of the applicant, and loans aimed at covering certified and regulated expenses in the health and well-being of the applicant’s family.

Types and requirements

Types and requirements

The different forms of loans offered by Social Welfare are described in the Loan Provision Regulations available on the Social Welfare website. Here are some of the loans available

Small loans

They can be annual, biennial, three-year or four-year and as the duration increases, the amount that can be requested also increases. It is possible to request a loan equal to an average net monthly salary or pension for the annual one, two for the biennial, three for the three-year, four for the four-year. The amount payable can be doubled if the applicant does not already have a transfer of the fifth in progress.

The TAN applied to the gross amount of these loans is 4.25%. At the time of disbursement, a withholding tax of 0.50% of the amount is expected to cover the administrative costs relating to the loan and a further withholding for the contribution from the risk fund, the percentage value of which varies according to the age of the applicant and the duration of the loan (from a minimum of 0.17% for the youngest to 15.39% for the oldest).

These loans will have an installment the amount of which can never exceed one fifth of the salary and the reimbursement will be made by withholding on the paycheck, as is the case for the transfer of the fifth. The possibility of renewing the loan once halfway through its duration is envisaged. It can be requested by public employees registered for the unitary management of credit and social benefits or by employees of the Italian Post Office and associated companies.

For teachers and school directors with permanent contracts in primary state and kindergarten, more than two years after retirement age, enrolled in the Magisterial Assistance Management, there is a reduced form of this type of small loans: not more than two average net monthly payments to be repaid in 24 months. The TAN applied will be 1.50% and interest will be withheld early on when it is disbursed, together with an additional 1% of the gross loan amount for administrative expenses and the guarantee fund. There are limitations in the proven reasons for the request (health, child marriage, birth or adoption of children, death of a family member, purchase of a car).

Anticipation of Old and New Mutuality Fund

Anticipation of Old and New Mutuality Fund

It can be requested by employees and pensioners registered in the Mutual Fund Management who have no disciplinary, revocation or resignation measures in progress. This is a loan that is disbursed by the Social Welfare in the form of an advance on the Fund and only for specified and certified health reasons (specialist visits, hospitalizations in private clinics, prostheses of various types, birth of a child, expenses for the funeral of a dependent family member etc.) in the case of members of the New Fund. No motivation is required for members of the Old Fund. The amount that can be requested is a maximum of 75% of the capital accrued by the members: for example, if the subscribed capital is $ 5,000, the maximum disbursable amount will be $ 3750 to be returned in 24/48 months, with an APR of 5 %.

These multi-year loans (direct or indirect depending on whether they are disbursed directly by the Social Welfare or by affiliated banks) are a strictly regulated type of financing both as regards the requirements to be able to access it, and for the reasons why it is possible to make the request.

First of all, you must be registered in the Unitary Management of credit and social benefits and have at least four years of working seniority and four years of contributions to the aforementioned fund. It is also necessary to have a permanent employment contract. The repayment takes place in 60 months (five-year loan) or 120 months (ten-year loan) and the TAN applied is 3.50% for direct loans (for indirect ones it depends on the institution that proposes it) to which during the disbursement phase there is also a 0.50% withholding tax for administrative expenses and one for the provision for risks, in the same manner and percentage envisaged for Small Loans.

It is possible to renew a loan of this type only after two years of amortization of a five-year loan and four years of amortization of a ten-year loan. This form of financing can be requested only for proven family needs of the member: moving, condominium work, buying a car or first home, marriage of children, illness, etc. For further details, refer to the Regulations.

Simulator of a small loan

Simulator of a small loan

To facilitate the evaluation of a small loan or a multi-year loan, a special simulator is available on the Social Welfare portal, to quantify the amount that can be requested, the duration and the amount of the monthly installments. To access it you need the PIN code issued by the Social Welfare.

How to apply make credit request

How to apply make credit request

In order to make a credit request, if you only have the online PIN, you need to convert it at an Social Welfare office into a device PIN. Once you have entered your reserved area through your login credentials, you will need to follow this click order: By Thematic Area, Credit and select the type of loan you wish to request. At this point it will be necessary to complete the form in its entirety and possibly attach the required documentation. In the same section of the Personal Area it will be possible to follow the process of the request and its outcome. Should the application be rejected, the applicant will receive a communication with the reasons for the refusal. Among the documents to be attached to the application we find:

  • certification of the state of need;
  • estimates and / or invoices of the expenses to be incurred;
  • medical certificate.

Social Welfare will carry out all the necessary checks during the request, disbursement and use of the financed amounts.
A little different is the method for requesting an Old and New Mutuality Fund advance.

As for the timing, these are not indicated on the official website, but looking on the net on some sector forums I noticed that they vary according to the type of loan requested and from region to region. For example, some users have seen the Small Loan being disbursed to their bank account in three / four weeks from submitting the application.