Temporary workers have a hard time not only on the job market, but also in the credit world. They have no permanent work and are hired at different companies at short notice. Either they are taken over by the company, they have to look for another employer or they become unemployed. This circumstance does not exactly make banks happy when it comes to loan for agency workers.
Why is it so hard to get a loan?
Temporary workers have an increased risk of becoming unemployed. Nobody knows how long the temporary worker will be employed in the company. This can be a few weeks or a few months. As soon as there is no new client, the temporary worker slips into unemployment. In addition, temporary workers often earn much less than permanent employees. Thus, the income per month is very low. Both factors are responsible for banks reluctant to lend to temporary workers.
Borrowing requires a fixed salary. This must not fall below the minimum rate, so it must be attachable. Banks like to see a loan contract that is indefinite. In some cases, they also grant loans with a fixed-term contract, but here the salary often complies with the conditions.
Contract workers who are interested in a loan will often face closed doors. Banks take no chances in lending. When they realize that repayment is in jeopardy, they often reject an application. However, the temporary worker can do something to ensure that he still gets a loan for temporary workers.
Preparation for the loan for temporary workers
In order to obtain a loan for temporary workers, precautions must be taken. Since the profession itself already carries a high credit default risk, this risk must be minimized. Banks like to see a spur on customers with a bad credit rating. This is very often asked and offers people with a bad credit the chance to get a loan.
The guarantor is used whenever the repayment is in danger. This must secure the credit with his income. This means that he has a seizable income that can be used if the borrower can not pay the installments. He serves, so to speak, as the second borrower who receives nothing from the loan amount. If the claimant does not pay a rate, the guarantor’s money will automatically be used.
In addition, the agency worker can opt for a small loan amount. If, for example, he only needs 1,000 euros, the bank can assume that the term is very low. The loan can be redeemed within a few months. If the temporary worker is employed on a fixed-term contract of half a year, he may offer the bank to repay the loan within that half year. The salary is secured in time and repayment can thus be guaranteed.
Are alternatives to the house bank recommended?
Certainly there will be alternatives to the house bank to take out a loan for temporary workers. But are these also recommended? Looking at the offers from the internet, it looks easy to get a loan. That may be, but what about the costs? Not infrequently, interest rates are much higher for private providers than for the house bank.
This means that the loan automatically becomes more expensive. Anyone who already earns little money will find it difficult to pay off an expensive loan. All fixed costs must be deducted from the salary. If you already have a bottleneck here, you will not be able to pay off a loan with high interest rates. With high interest rates, the repayment rate increases monthly and everyone has to decide for themselves whether he can afford it.