Because of their secure income, civil servants are given more favorable terms when lending than other workers. A cheap loan for civil servants is characterized above all by low interest rates and long terms.
This results in moderate monthly installments for the borrower even with larger loan amounts. A cheap loan is offered to officials from various banks and insurance companies.
What is a cheap loan for civil servants?
In addition to civil servants, such a loan can also be given to employees who have been in the public service for a long time. Depending on the provider, loan amounts between USD 10,000 and USD 100,000 are offered. The amount of credit that is possible depends on the monthly income of the borrower.
The long terms of between 12 and 20 years are particularly advantageous. The interest rates are significantly lower than for comparable loans. For most providers, this depends on the amount of credit required and the term chosen. The loan is paid out for free use. However, no further loans may exist in addition to the official loan.
Anyone who has already taken out a loan must repay it with the official loan.
How is a cheap official loan repaid?
The official loan is repaid through a life insurance policy. The sum insured and the term of the life insurance correspond to the official loan. While the interest is paid monthly to the lending provider, the repayment is made via the life insurance contributions.
As soon as the term of the life insurance has ended, the loan is repaid in full in one sum. In the event that surplus shares are incurred during the term of the life insurance, these are paid out to the borrower.
Advantages of an official loan
In addition to the favorable conditions and the low monthly installment, a cheap loan for civil servants has a number of other advantages. The borrower and his family are fully covered for the entire term by taking out life insurance. A further life insurance or a residual debt insurance is therefore not required for the loan.
Upon request, the borrower can take out an insurance against invalidity. This secures the loan in the event of illness or incapacity to work. When the insured event occurs, the insurance covers the monthly installments or the outstanding loan amount.
No processing fees are charged for the official loan. In addition, borrowers can install a discount on most providers on request. This allows the amount of monthly payments to be reduced even further.
Of course, the payment can also be made 100 percent on request. Of course, the chance to receive attractive surplus shares is also an advantage. These are paid in full to the borrower at the end of the term.