The economic situation is mainly reflected in the nature of the employment contracts. More and more employees are only hired with a temporary employment contract, so that the companies retain the necessary flexibility. This affects almost every layer of society, from factory workers to teachers.
But all of these people can get into situations where a loan is needed. Be it for the realization of a construction project, for the purchase of a vehicle or for other expenses. But getting a loan with a fixed-term contract often turns out to be difficult. As a rule, banks require an open-ended employment contract to secure their loans as a basis for approval. Despite everything, there are still opportunities to get a loan even with a temporary employment contract.
Loan with a temporary employment contract: often a matter of negotiation
Especially when approving loans, a not inconsiderable part of the decision depends on the personal appearance of the borrower. Even if banks and credit institutions have to adhere to certain guidelines, it is often the personal impression that decides whether to grant or refuse a loan. It is particularly important that the borrower is adequately prepared for the conversation with the bank advisor.
Such preparation includes, above all, establishing your own financial situation. All income and expenses should be recorded thoroughly and recorded in writing. On the one hand you can emphasize your own competence and you can already see the maximum rate.
If you can convince the bank advisor during the credit meeting that your own employment contract will be extended or you can already provide a guarantee of the employer to take over, a loan can also be approved with a temporary employment contract. The decisive factor here is the competent impression and a perfect appearance when negotiating with the banks. The personal opinion of the bank advisor can in many cases be decisive for the bank’s credit decision.
Loan with a temporary employment contract thanks to collateral
In order to obtain a loan with a fixed-term employment contract, it is also possible to offer the corresponding collateral to the banks. Because of your own secure financial situation, such collateral can often be easily provided. Possible collateral includes real estate and land, life insurance and building society contracts, guarantors or, in special cases, vehicles. Depending on what the loan is needed for, different types of collateral can be used.
- With mortgage lending, for example, it is common to offer an entry in the land register as security. This means that the bank is entered in the land register in order to have direct access to the equivalent of the house if payments by the borrower are no longer possible. With vehicle financing, for example, the vehicle acquired in this way is usually used as security. The bank thus becomes the de facto owner of the vehicle until the loan amount has been paid off.
- However, the other collateral mentioned can also be used for a loan. The choice of collateral generally depends primarily on the desired loan amount. The easiest way to realize high loans is through appropriately filled financial investments such as life insurance or building society contracts.
- Small consumer loans are usually secured by a guarantor. This guarantor becomes part of the loan agreement between the borrower and the bank and must contractually agree to repay the loan if the borrower can no longer service the loan. Any guarantor can be a guarantor if he meets the requirements for a loan, ie sufficient creditworthiness and clean Credit Bureau information.
Thanks to the wide range of options available to secure the loan agreement with certainty, you can usually get a loan from a bank even with a fixed-term employment contract. However, if there is no collateral, the borrower has to go another way to get the money he needs.
Loan with a temporary employment contract from private
Probably the easiest and least complicated way to get a loan is a personal loan. Even if there are now various platforms for this on the Internet, they fail in this special case. Since all of these platforms require a permanent contract of employment to apply for a loan, you cannot get a loan there with a fixed-term contract. So there is only the way to personally known people from whom you can request a loan.
Since your own financial situation is stable and only the temporary employment contract prevents you from receiving a loan from a credit institution, chances are good to get a loan from a friend or relative. Since the situation can be communicated to them in this way, there is nothing to prevent the borrower’s creditworthiness. The main advantage of this form of loan is the high degree of flexibility. Loan amount, interest and duration of the loan can be negotiated quickly and easily, so that nothing stands in the way of quick provision of the loan amount.
However, as a borrower, you should make sure that such a loan is also concluded with a loan agreement. This protects you from unjustified claims by the lender and you are always on the legally secure side. Such a contract only has to contain the relevant, important data: date of the loan, borrower and lender, amount of the loan, agreed interest and terms. If all these points are included, such a contract provides legal security for debtors and creditors in all situations.
Even with a temporary employment contract, corresponding loans can be realized in various ways. Depending on the available collateral, the usual banks and credit institutions can also be considered as lenders. As an alternative, there are loans in your own circle of friends, especially if only small amounts or short terms are required.