Loans to protested public and private employees and bad payers represent an easily circumventable obstacle if you have a permanent contract, or even for a fixed term but of a duration long enough to afford a loan: in fact, even in the face of mistakes past financials that led to a report to the end-to-end knowledge company or to the Register of Protests, there is for public and private employees the possibility of resorting to the assignment of the fifth, a financial instrument that ensures and protects the bank from the risk of insolvency, and which therefore easily makes a sum of money can be paid in this way thanks to the special reimbursement formula, differentiated from the classic personal loan. With the transfer of the fifth, loans to protested public and private employees and bad payers are an established practice and there are no particular obstacles to their payment.
What is the fifth assignment
The sale of the fifth is a particular form of personal loan reserved for employees of the public and private sector, as well as pensioners, who can offer the guarantee of a fixed and certified remuneration as protection of repayment: in fact its peculiar characteristic is that the amortization of the debt takes place through direct deduction of the monthly salary installment, for a total sum that cannot exceed 20 per cent of the total, precisely a fifth, from which the name of this financial product originates.
Unlike the classic loan, therefore, the installment is not paid by the lender, but by his employer (or the pension institution in the case of pensioners) to the credit institution that has actually disbursed the loan, which is why they are possible loans to protested public and private employees and bad payers, since the previous non-compliances certified to the applicants do not affect their ability to repay, since the latter is direct and guaranteed by the employer.
The importance of the contract
Obviously the element that secures the bank from insolvency risk is not the job itself, but the duration and type of the contract : the assignment of the fifth is in fact reserved almost exclusively to those who have a time contract undetermined, for which the guarantee sufficient to protect the repayment of the contracted debt is presented. There is the possibility of having a fifth assignment even for those who have a fixed-term employment contract, but in this case the duration of the loan can never exceed the time limit set by the employment contract: this is to say that for example, if a private worker has a contract expiring in 3 years, he will be able to stipulate a loan with a salary assignment for a maximum of 36 months.
The characteristics of the sale of the fifth
Briefly summarizing the essential characteristics of the assignment of the fifth, we can identify in this scheme the salient points, which are:
- Direct withholding of the repayment installment of up to 20 per cent of salary or pension
- Duration between 24 and 120 months
- Fixed interest rate
- No guarantor required
- No proof of expenditure
- Provision also for protesters and bad payers
- Possibility to have an advance on the total sum
- Possibility of disbursement also with other loans in progress
- Mandatory insurance
As with all financing requests, the worker must present to the financial company or credit institution, going to the branch or directly online where possible if it requires the transfer of the fifth through the web, a specific documentation that concerns both his own personal data that the certifications concerning one’s contractual and economic classification, for which it is necessary to attach:
- Copy of identity card
- Tax code or health card
- Last paycheck
- Salary certificate containing the date of employment
- Annual and monthly remuneration, both gross and net
- Amount relating to the severance pay accrued up to now
- Any deductions already present in the pay slip
This information allows the financial company in the preliminary phase to understand if it is possible to pay the fifth assignment at the required conditions and to fix the amount of the monthly repayment installment. Very important: in addition to all this, the employee must sign a proxy authorizing his employer to pay the installment of the loan every month through the withholding of salary, while the bank or financial company will contact the employer of the customer to inform the company by notifying the salary assignment, thus committing the employer to timely payment of the installments, by notifying him of the loan agreement. We specify this because we often read about an “approval” by the employer, but it is simply a question of the bank notifying us of the conclusion of the salary assignment: once we receive this notification of transfer from the issuing bank, the employer is obliged to proceed with payroll deductions and monthly installment payments on behalf of his employee.
The necessary guarantees
Being protested or bad payers does not require further guarantees with respect to the request for salary assignments in general, however a series of guarantees are necessary regardless of the presence or not of previous financial problems: although the financing is in fact assured by the accrued severance pay, it is requested an obligatory insurance that protects from life risk and job loss for the part of the loan that exceeds the same TFR, additional costs that are also deducted from the monthly salary envelope and that are normally counted in the so-called APR, the Effective Annual Rate Global, which includes all the costs and charges associated with the loan granted, when the contract is signed. Finally, we remind you that for the entire duration of the loan employees cannot request advances on the TFR.
The fifth assignment contract
Once all the documentation has been carried out and the preliminary phase completed, it is possible to proceed with the stipulation of the loan contract, which must include:
- The interest rate charged
- The total amount of the loan and the payment methods
- The number of installments, their amount and the respective deadlines
- The terms of the loan
- Other miscellaneous expenses, including interest to be paid in the event of default
- The APR (Annual Global Effective Rate) and the respective conditions that modify it
- Reasons and amounts of expenses not included in the APR
- Insurance coverage
- Guarantees if required
The TAEG as we have said includes all the costs and ancillary charges such as installment fees or sending the annual report, however in the case of the salary assignment, insurance costs may be excluded and charged separately. Therefore it is good to ask the bank for the amount of insurance costs if they are not reported in the APR.
How much can I request?
The question that many of you readers will be asking is how much I can ask for with the sale of the fifth, even more so if I have been reported even only by mistake as a protestor or bad payer, making it more complicated to obtain a loan. Well, the maximum amount that can be requested is subject to several variables : there may actually be a disparity between what is required and how much a financial company or credit institution is able to provide, and this depends above all on from the amount of accrued severance indemnity and accumulated years of seniority, as well as trivially from the monthly amount of your salary on which automatic retention will be applied. Since the monthly payment cannot exceed one fifth of the salary, it is clear that the higher the salary amounts and the severance pay, the greater the monthly repayment installment and, consequently, the payable capital. The length of employment affects the accrued severance indemnity which, being higher, will automatically become a greater guarantee to be offered to the credit institution or the financial company.
Get more with the payment proxy: is it possible?
Theoretically, there is a possibility of having a higher figure than the fifth assignment: you can use an instrument called payment delegation, otherwise known as a double fifth, since in this way you can sell two fifths of your salary. We have said theoretically, since this financial instrument, in addition to being open only to employees (and not even to pensioners as for the salary assignment), is optional, or the employer is not at all obliged to grant the authorization for the retention as in the classic transfer, so it is easy for a company to express its denial. If this happens already in normal conditions, it is easy to understand how for a protested employee or bad payer it is far from obvious to get the go-ahead from the company for such a large sum.
As we have anticipated, with the assignment of the fifth a mandatory insurance coverage is provided for life risk and employment risk: this policy combined with the salary assignment is necessary because it allows the credit institution or the financial company that provides the loan to protect itself against all those events that could affect the reimbursement capacity of the worker client: in fact the beneficiary of the insurance policy is the lender of the loan, or the bank itself, which will collect the residual amount of the credit in the event of one of the events covered by the insurance, ie sudden death, loss of job, reduction of the salary such as to no longer allow the repayment of the entire share sold. It is very important to assess how much the insurance has on the total cost of the loan, since very often this calculation is based on the convenience or otherwise in stipulating the transfer with that bank.
Calculation of the installment of the fifth installment
If you want to know how much you can actually get with the fifth assignment on the basis of your salary you can turn to online calculators that in a few minutes at most provide the answer by entering the data required. In general, to calculate the installment of the fifth assignment, you need to calculate the value of the net monthly salary, through these simple steps:
- Calculate the gross annual salary (including the thirteenth and, if any, fourteenth)
- Calculate the net annual remuneration, removing all taxes, pension contributions and provisions for severance pay from the gross
- Divide the net monthly fee by 5 to get the transferable fifth
- Multiply the value of the transferable fifth by the duration of the loan expressed in months
Examples of assignment of the fifth
Let us now see some examples of salary-backed loans, which can also be applied to protesters and bad payers, taking into consideration some of the most highly rated and relevant players on the market. These are purely indicative examples to understand the basic financial conditions offered by individual financial companies or credit institutions on the market.
Sale of the fifth PLN
The fifth PLN transfer offer provides for a maximum amount that can be financed up to € 104,000, a minimum installment of € 50, duration from 24 to 120 months, the last two pay slips in the required standard documentation. On the dedicated page you can request a quote to get an idea of the interest rates applied.
Cleopar assignment of the fifth
Employees in the public and private sector can apply to Cleopar to obtain a fifth assignment of up to 50,000 euros in 10 years, for all those who are between the ages of 18 and 63, a permanent contract, and a company assured that it provides sufficient guarantees.
The sale of the fifth of Astrofinance
Considered one of the largest financial institutions in the country, Astrofinance offers a salary-backed loan in two ways, for classic employees and for those who can benefit from state-owned and public employees with the NoiPA system. The Astrofinance offers change periodically, but for September 2018 the fifth sale provides for example a financeable amount of € 16,000 in 120 months with an installment of € 176 per month, with a fixed TAN of 5.80 per cent, a fixed APR of 5.95 per cent.
Sale of the fifth of Ultranix
We close our case studies with another of the financial companies most appreciated by users: the sale of the fifth Agos also has additional advantages and benefits deriving from the Credit Net service (Ministry of Economy and Finance) reserved for public and state employees administered through the NoiPA system, and the possibility to request the financing immediately via the official website. As with all the cases described above, the salary assignment can also be assessed for protested employees or bad payers registered on the specific lists, and who normally could not have access to credit.