When you need to access credit, and therefore ask for a loan from your bank, the first criterion that you must fulfill is that relating to the sustainability of the debt that you are going to contract, for which the bank asks for certain guarantees, whether they are income or assets. There is, however, also another type of possibility, given by the so-called transfer of the fifth, which makes it possible to obtain a loan to those who can present a paycheck or the pension slip.
The operation of the loan granted with the practice of transferring the fifth is not very complex and is a fairly widespread situation. In the following paragraphs you will find out everything you need to know if you intend to go to the bank to apply for a loan and return the amount with this type of solution.
Repay a loan with the assignment of the fifth
The same term says it: “transfer of the fifth”. In a nutshell, it is a question of repaying the loan obtained, allowing the financial institution to withdraw the share of a fifth directly from the salary or from the pension.
More generally, the term assignment of the fifth is used to indicate consumer loans, which are granted to private individuals without the need to declare the reason for the request. Here, therefore, that this type of solution is perfect for those who face unexpected expenses, needs to obtain liquidity in a short time and has a regular employment contract or is retired, since this practice has long been dedicated also to this type of clientele.
The maximum percentage that can be withheld from salary or pension is 20%.
How the assignment of the fifth works?
The repayment of a loan with the assignment of the fifth is very simple. Instead of having to cover the monthly installments agreed upon when entering into a loan agreement with the bank, with payments made by bank transfer or postal bulletins – the most common forms – with this method the employer will retain the same the amount of the installment to be returned in the paycheck.
Since the retention of the fifth of the salary takes place directly in the pay packet, only employees with permanent contracts can ask for this type of solution. Furthermore, only certain types of companies have the option of accepting such an application by an employee: for example, they are large companies, or in any case those that have a certain number of workers or that can declare a share capital of a certain importance .
Who can apply for a loan with the assignment of the fifth: characteristics
Let’s now pass to the essential characteristics to be able to access credit with the assignment of the fifth, here are what they are:
- Be 18 years old
- Not to have passed the age of 85 when the loan expires
- Being employees with a regular permanent contract
- Being retired
In the case of retirees, the fifth on the pension will be withheld directly by the social security institution that provides the pension, and the installments will therefore be paid by the institution to the banking institution.
Workers who apply for a loan with the formula of the transfer of the fifth, during the period of repayment of the loan can not ask for advances on the severance pay to the employer.
The reason is very simple: in case of dismissal or termination of the employment relationship, if the worker is still paying the loan installments, these can also be covered by the employer using TFR funds. It is an additional guarantee.
Should I apply for a loan with the transfer of the fifth?
This solution is certainly suitable for those who need liquidity, and do not want to have the thought of repaying the installments. Or to those who have no other guarantees to propose to the financial institution.
Obviously, the costs of this operation must be considered, which presupposes the preliminary costs, bank commissions, the interest rate and the necessary insurance policy, sums that will affect the monthly installment of the deduction.