Month: February 2020

Not only people with constantly changing jobs, but also employees with temporary contracts, do not have a permanent job in the view of the banking industry. Furthermore, some financial institutions also do not consider employment with a temporary employment agency to be a permanent job, which contradicts the labor law character of the employment contract for temporary workers.

Borrowing with special employment contracts

A loan without a permanent job in the sense of a current temporary employment contract is easiest to take out if the loan is repaid by the end of the current employment relationship. In this case, the borrower has a secure income until his liabilities have been repaid and is also protected against redundancies caused by the company due to the time limit. Temporary workers make sure that the credit bank they prefer does not generally exclude them as loan customers. According to their own understanding of labor law, they already hold a permanent job, albeit with changing jobs.

Day laborers are most difficult to get a loan without a permanent job because they lack the security of finding a new job every day. If the partner has a permanent job, borrowing via this partner is the only borrower or at least as a co-applicant. Instant loans without proof of salary are a possible solution for borrowing without a permanent job, but the prerequisite is that the applicant provides the correct average income. Deliberate misstatements mean that a financial institution can terminate any loan when it is discovered, even if it has been properly repaid.

Alternative credit options without a permanent job

When granting an overdraft facility, most banks evaluate the average monthly cash receipts without paying close attention to their origin. If the Credit Bureau information is positive, many credit card issuers issue an initially low credit limit without proof of income. These variants lead to a loan without a permanent job, but are significantly more expensive than installment loans. Another alternative is borrowing via a platform for personal loan brokerage. The loan seeker describes his personal situation and the purpose of the loan in his loan demand.

Private members of the relevant platform who are registered as donors often fulfill credit requests because they support the goal of borrowing and at the same time want to promote applicants who are only partially able to borrow from a bank. Ordering installments in retail also leads to a loan without a permanent job, since there is hardly any demand for the employment relationship. Borrowers without a permanent job make sure that they can pay the loan installments even when they are temporarily out of work.

Loans are taken out by different groups of people for different reasons. It is usually quite easy to get a loan from the bank. But there are exceptions, too, because it will be very difficult for those with no permanent employment relationship to obtain a loan.

Why is it hard to get the loan?

Those who do not have a permanent job do not have a regular income. Without an income, however, no installment can be paid for a loan because the money is just enough to pay the fixed costs. The bank where the loan is to be taken out lacks the certainty that the loan will be repaid and excludes this group of people.

Chances of getting a loan anyway

Getting a loan without a permanent job is very difficult, but it’s not impossible. If you are well prepared for a conversation and know what banks require for collateral with a poor credit rating, you will have a good chance of getting a loan without a permanent employment relationship. Those with poor credit ratings can certainly improve them.

On the one hand, a guarantee can be offered so that the bank can be sure that the installments will be repaid even in the event of a loan default. However, a surety can only be used if the person has a permanent job that is not limited in time and does not have any negative entries in the Credit Bureau. If you cannot find a surety, you may have life insurance that has a surrender value. If this is the case, the bank often grants a loan without a permanent employment relationship in such cases.

What should borrowers look out for?

Even if the selection of credit institutions that grant a loan without a permanent employment relationship is not very large, the few offers should still be compared. The interest and processing fee can vary widely, so that even with small loan amounts you can always save a little money. Those who cannot show any collateral at the bank and receive no credit should contact private individuals who may borrow a small amount of money. This can at least guarantee that the most important bills can be paid.