Temporary work is termed a temporary work. It comes about on the basis of a temporary employment relationship between the borrowing and lending companies. The employed person is hired by the borrower and hired on a temporary basis for temporary employment. This form of employment, taken over from the USA several decades ago, favors the interests of employers. A loan despite temporary work is possible.
How can a borrowing work?
Other terms for temporary work are staff leasing, temporary work or employee leasing. The employee is always in the same situation to exert only temporary employment at a significantly lower income than those employees who are employed on permanent and indefinite when user company.
The remuneration of the temporary worker is also reduced because he indirectly co-finances the earnings of the borrower, so to speak of his employer. On the other hand, he would not be able to get the temporary job without borrowing.
Taking out a loan despite or with temporary work is by no means easy. The lender checks the individual credit default risk for each individual loan. To exclude this, several conditions must be met. These include the income situation. The earned income has to be high enough, it has to be safe and durable. A handicap for the loan despite temporary work is the durability.
Since the spring of 2017, a maximum legal period of one and a half years applies to temporary work. Chain deliveries, ie several concurrent temporary employment relationships with the same company are excluded.
From this situation results for the temporary work a temporally foreseeable financial uncertainty. The temporary worker can not plan for more than about 18 months. At this point, the already known at the credit check financing risk of the credit provider begins.
Credit despite time limit possible?
Depending on the type and qualifications of the temporary work, the monthly income of the employee may well be so good and high that the desired loan is easily repayable. The job security criterion is not a problem for temporary work today. Every reputable company concludes an employment contract with its temporary workers. But the limitation can not be overlooked.
It is required by law with the aim of reducing temporary work as such. Instead, the lending companies, as original employers, are to hire the leased temporary workers indefinitely. This is precisely what employers want to avoid because it involves long-term costs, effort and social obligations. This dispute takes place on the back of the temporary worker.
Also, or especially with temporary work, borrowing can not be waived in many cases. Interest rates on loans are one of the major sources of income for the credit institutions authorized as universal banks under the Banking Act (KWG). In this sense, lending together with the settlement of payments is one of the core tasks of all banks. You have to balance between the credit risk on the one hand and the credit interest on the other hand.
For all companies in the private sector, the focus is on sales and profits to secure a livelihood, including banks and savings banks. In these years, temporary employment, with its millions of employees, has developed into a professional sector that can neither be overlooked nor overlooked. The credit institutions are almost forced to develop various models for the loan despite temporary work.
The margin of discretion within the lending guidelines of the individual credit institution is used to a large extent without neglecting the associated credit default risk.
This tightrope walk offers the following opportunities for a loan despite temporary work.
5 tips on credit despite temporary work
1. Are there any chances of a follow-up employment?
The loan amount and repayment term are adjusted to the duration of the employment contract. In individual cases, it must be weighed how the chances of the loan seeker to look for a follow-on job. Naturally, for a two-year loan, even with an above-average income, the loan amount is limited to the top.
This credit rating is always a case-by-case assessment. The evaluation criteria include pre-employment periods and the use of the loan amount; either as an investment in movable household goods or for the moving house with the purchase of a fitted kitchen, or for the car purchase for the daily trip to the workplace.
The responsible temporary worker will invest the loan amount rather than consume it.
2. Can a guarantor come in?
For a loan in spite of temporary work with a term beyond the existing temporary employment contract, it is advisable to provide a guarantor. With its creditworthiness, the problem of temporary employment being fixed in one fell swoop. The borrower and the guarantor are aware of the financial situation.
Both know that a payment on the guarantee under normal circumstances is not necessary. The lender is also helped. For lending despite temporary employment, two contracts are required; on the one hand the guarantee, and on the other hand the credit agreement.
The loan is paid out to the temporary worker. Should there be any payment problems with the borrower, the guarantor automatically assumes his payment and contract obligations.
3. Is a second borrower conceivable?
Another way to cure the lack of creditworthiness of the loan seeker is a second, accordingly creditworthy borrower. Not the income level, but income security beyond the current temporary employment contract is the credit problem for the bank. Both borrowers are jointly and severally liable for the loan.
As long as the loan is serviced with the interest and principal payment, it does not matter to whom the lender. Due to the joint and several liability he has the security: If one does not pay, the other must pay automatically. The basis for this is the overall creditworthiness and joint liability of both borrowers. They are both responsible for all rights and obligations relating to the loan.
4. Decision in an individual case
The lender may assume on a case by case basis that the temporary worker is permanently seeking full employment; at best in a permanent employment relationship, and in the worst case in temporary employment. The employment gap between two employment relationships is closed with a mini- or part-time job, as in the past.
This documents the intentional waiver of transfer payments from the job center. In this situation, the benevolent lender can also rate the intermediate job income as creditworthy earned income. In spite of temporary work, he does not make the loan dependent on the working time limit, but on the permanence of the income.
This helps both sides. The bank forgives the loan and earns the interest, while the borrower can dispose of the required loan amount.
5. Use the credit line
The first way for a loan despite temporary work should lead to the house bank with the aim of granting a not yet granted MRP credit in the salary account, or to increase the existing one. The readiness for the allocation of the disposition credit is basically present with a regular work income. The temporary worker may submit a temporary employment contract to his house bank.
The nature of the interim loan includes flexible handling of loan repayments. This allows easy bridging for a few months or more without a loan repayment; Say the time span between the existing temporary employment relationship and a follow-up employment.