As a rule, officials are preferred customers at every financial institution. This is primarily due to their secure job combined with a relatively high income. Nevertheless, cheap official loans, for example when financing a property, are often the better option.
Official loans are only granted to probationary officials, life officials and civil servants. In contrast to conventional loans, life insurance is taken out at the same time as the official loan. The civil servant loan and capital life insurance have a uniform term.
Cheap government loans are usually around 50 percent cheaper
Cheap government loans are usually around 50 percent cheaper than traditional loans. In addition, the borrower only pays the loan interest per month and the rate for the civil servant loan is compensated through the contribution of life insurance. Since capital life insurance policies have always generated fairly good surpluses, the borrower can assume that an amount from the surplus generated will be credited to his account at the end of the term of the life insurance policy.
In addition, capital life insurance is an additional plus, which should not be underestimated, due to its death insurance for the policyholder, which cheap civil servant loans have.
In addition, the interest rate for the entire term is fixed, processing fees are also waived and cheap official loans are not subject to a Schufa query. Special repayments of the loan are also possible at any time, except for the first year after the loan has been concluded.
Cheap official loans also have a disadvantage
Despite all the advantages, cheap official loans also have a disadvantage – the prerequisite for granting a loan is that the borrower does not have to use any other loans. If a borrower already has a loan at the time of applying for an official loan, it must be replaced by the official loan.
In addition, no additional loans may be applied for during the term of an official loan. However, should there still be an additional need for liquid funds, the only option is to apply for a Schufa-free loan. This is usually relatively expensive, so it is recommended that this be taken into account from the beginning in terms of the amount of the loan for a civil servant loan.
The respective net income can normally be approved as a loan
However, since around 20 times the respective net income can normally be approved as a loan amount, the planning of smaller financial bottlenecks should not be a problem. Both the Nuremberg Insurance Group and the Good Finance Group offer cheap civil servant loans, among other things.
For example, a civil servant loan is available from the Nuremberg Insurance Group with an effective annual interest rate of 6.75 percent. A civil servant loan from an annual percentage rate of 7.26 percent or higher is available from the Good Finance Group.
However, not only the interest rate of the loan should play a role in the decision-making process, but also the maturity of the respective life insurance should be taken into account.