Public or private municipal employee loans – Differences
Job specialization has become a cardinal principle in service delivery without losing control of spending. In this panorama the municipal companies have proliferated, that is those private law companies (rarely with public participation), without autonomous legal personality, which offer services or perform specific tasks on behalf of the “municipalities”. The particularity of these companies lies in the fact that they carry out entrepreneurial activities (see also Financing for entrepreneurs ), and to do so they can stipulate a series of contracts of different form, especially as regards the management of their employees.
The lack of harmonization of the contracts stipulated, between companies often linked to the same Municipality, often does not allow to identify those that are the possibilities of access to the world of financing, first of all the sale of the fifth, where is the nature of the employer of the job and its objective characteristics, which can exclude the granting of the loan. Having said that, what are the possible alternatives of loans reserved for employees of municipal companies?
When can the fifth assignment be obtained?
A dependent employment relationship is a conditio sine qua non, in the absence of which no fifth can be obtained. However, the status of an employee, especially in the private sector, does not guarantee the possibility of being able to obtain funding. When dealing with requests for loans for municipal employees, in the specific form of salary-backed loans, you can usually count on a treatment equalization with the conditions reserved for state, public, parastatal employees, etc.
Difficulties may occur if you hold a fixed-term contract, but for those with a permanent contract, at least theoretically, there should be no problems. In practice, however, there are difficulties and differences in treatment that are largely due to the reliability that the Municipality can show for which its own municipal company works. For example, the City of Rome, which is among the largest, by number of municipal companies and their employees, is also a municipality that has difficulty in guaranteeing reliability, and requests for the sale of the fifth are often refused.
Each case must be seen at the time, so it is always worth making a request for a quote, and ascertaining whether the bank or financial institution will grant the sum you wish to have (see also Guide to online financing ). In the research, to simplify the process, you can start by asking the banks or financial companies that have agreements in progress, subsequently comparing the proposals received with offers external to these agreements. In some cases the conventions are palatable only from the theoretical point of view while in practice they are the same as other non-affiliated proposals, and in some cases even more expensive.
Treatment by public employees? Not always
As already mentioned several times, the very particular nature of municipalized companies forces banks and insurance companies to question themselves about the solidity of the company itself, as indeed happens with private companies. The hybrid nature of these entrepreneurial realities, however, complicates the evaluation phase, and therefore there may be concrete possibilities that a fifth assignment request be refused.
The equalization of municipal employees to public ones, on the other hand, ensures that the minimum seniority requirement is respected. So instead of having matured at least 6 months in the employment position, as happens for private employees, it is sufficient that we have reached at least 3 months. However, in the case of fixed-term employment contracts it is necessary to have a residual contract term equal to at least the expiration of the transfer agreement.
On the duration of the contracts, always in compliance with the applicant’s terms and conditions (maximum age at the end of the 70-year contract) and the contractual terms, the minimum duration starts at 24 months, while the maximum duration can reach 120 installments.
Despite the equalization of the position to public employees in general, some reserved products, such as the Government agency loans, remain outside the accessible advantages. These require the possession of very specific requirements and above all are addressed only to those who have the possibility of obtaining the optional registration to the Unit of the Unit for credit and social benefits. All others who lack this possibility cannot access the Government agency loan except indirectly, or as a spouse or family member of a public employee who has the minimum necessary requirements.
Is personal loans better?
But be careful, even if some facilities are obtained, especially in terms of accessibility reserved for public employees, the transfer nevertheless represents only one of the possible alternatives for loans for municipalized employees.
With personal loans (which are structured differently from the sale of the fifth), the attention of the banks and financial companies surveyed will focus entirely on the income capacity and credit standing of the applicant. Therefore personal loan offers greater freedom of evaluation. On the other hand, the possibility that the request will not be accepted increases, in addition to the fact that in the case of bad payers and protesters this road is absolutely not viable.
The rates of personal loans tend to be slightly higher than those applied to salary-backed loans, for which there is still some sort of compensation for the presence of the mandatory insurance quota. It is always possible to find lower rates, or other facilitated conditions (for example, the cancellation of management and preliminary costs) if you turn to affiliated financial companies. Here the agreements have a local character so we must turn to intermediaries or agencies specifically indicated in the letters of agreement.
For personal loans that are not transfers, the durations can range from a minimum of 6 months to a maximum of 84 installments as an average, but with some banks and financial institutions you can still get up to 10 years of total repayment.
There is little choice of loans for employee of the municipally-owned companies proposed in a specific way, but the possibility of obtaining some concrete advantages is still present. To appreciate the quality and the extent of these advantages one must start from the conventions and compare them to the loans granted to all those who have the necessary income and credit credibility conditions.