The civil servant loan, also civil servant loan, is a special loan for civil servants, i.e. civil servants, judges, civil servants, but also for pensioners or civil servants on trial.
Sometimes holders of academic professions also benefit from an official loan.
The peculiarities of the official loan
What is special about an official loan? The lenders assume that employees in the public service (including academics outside the public service) live in particularly secure income relationships.
Therefore, a very low risk of default is assumed.
Banks and / or financial service providers reward this with very favorable credit terms, which are, however, tied to a number of requirements.
In order to be able to grant cheap loans in this way, the financial industry has launched a special construction: a combination of life insurance and credit. Basically, the civil servant loan is nothing more than a life insurance loan.
It thus resembles the so-called policy loan with which life insurance is lent.
The borrower takes out life insurance and combines it with a loan equal to the sum insured.
The actual civil servant loan is actually a life insurance paid out in advance. At the end of the term, the loan is repaid by life insurance. If there is a surplus, this is paid out to the borrower.
The construction of the official loan explains the relatively low interest rate and some special features.
- The minimum loan amount is usually 10,000 dollars. The maximum amount is limited to around 80,000 dollars. The maximum amount depends on the monthly payments.
- The term of the civil servant loan is usually between 12 and 20 years. The reason for the long minimum term: Only with a minimum term of 12 years and with 60 monthly installments or more, the expiry amount of the life insurance is paid tax-free.
The advantages of the official loan can be summarized as follows:
- The loan is characterized by long terms (144 – 240 months).
- The minimum amount is usually 10,000 dollars, the maximum amount is 80,000 dollars, provided a corresponding income is also more. This information varies among providers.
- The loans are not earmarked; official loans are characterized by a constant monthly charge over the entire term, which is lower than that of normal loans.
- The civil servant loan is covered by life insurance and a possible surplus is paid out to the borrower at the end of the term.
- Because of the favorable conditions, the civil servant loan is well suited for debt restructuring.
Online official loans
It is possible to apply for the civil servant loan online. Sometimes additional requirements are imposed on the groups of people who are eligible for an official loan.
Some providers also grant private sector workers the benefit of civil servant loans in a long term contract. The following providers, for example, enable you to apply for a civil servant loan online:
The information in the offers has been thoroughly researched and will be adjusted at appropriate intervals. No guarantee is given for the correctness.
A large number of financial service providers are promoting the official loan on the Internet. It is always advisable to obtain several offers, which, however, should be free and non-binding, in order to find out the cheapest civil servant loan according to individual needs.