Lifetime officials always have a special status in the credit world. This is mainly because they are almost non-cancellable. The salary is guaranteed for life and thus the security for the bank is given that the loan will be repaid without any problems.
Special features of the loan for lifetime officials
Life officials do not only have a secure job that enables them to borrow for life officials. They are so important that the loan amount is almost irrelevant. The space above is extensible, so that a house can be financed without problems with the loan.
The loan is often characterized by low interest rates and a long term. Not even a normal employee installment loan has such a good interest rate. The credit rating is rated as excellent, so the loan has many advantages. In addition, the applicant often does not have to guarantee a loan for lifetime officials. The guarantor serves as security for banks in loan agreements. The profession alone is enough for the bank to grant the loan to lifetime officials.
A guarantor is only required if the applicant has too many negative entries in the Credit bureau because, for example, he has failed to meet his payment obligations in the past. With a guarantor, it will also be no problem to take out a loan amount of 100,000 USD.
Only civil servants get the loan and it must also be specifically asked for. In this sense, no special loans are offered to civil servants. However, if the applicant can demonstrate that he is a lifetime official, then he will be able to enjoy the benefits of the loan. If he does not explicitly ask for it himself, he will be offered a normal installment loan.
Conditions attached to the loan
It is often the case for life officials that the applicant must take out life insurance. In this case, the official does not have to repay installments of the loan, but the insurance contributions throughout the term. It is paid until the loan amount is repaid.
The advantage of this approach is that the borrower also protects his family. If there is an accident in which the borrower dies, the family does not have to repay the loan for life officials. This repayment is made with the life insurance that has been taken out.
As soon as the loan has been paid off, the insurance expires. Since life insurance often saves shares, these are paid out at the end of the term. Thus, the official has a clear financial advantage. The official also has the option of using the surplus of the insurance to repay the remaining amount of the loan. This way he would be able to finish the payment faster and would have less financial burden.
Borrowing for civil servants
On the one hand, civil servants can contact the house bank to apply for the loan. But there is also a special civil servant bank that only takes care of these loans. Workers who have an excellent credit rating and who have full points in the Credit bureau will not be able to get the loan. Officials should also carry out a credit comparison. Even if the interest rates are very low, the loan for civil servants at the insurance company can save money.