It is becoming increasingly common that an employment contract is not concluded for an indefinite period, but is only limited to one or two years. This has less to do with the qualifications of the worker, but more with the general economic situation.
In academic circles in particular, it is quite common to only conclude an employment contract for a limited time and then to extend it accordingly. This has some disadvantages that should not be underestimated for those affected. This means that they can only rarely plan for the future and sometimes have considerable difficulties in getting a loan despite a fixed-term contract. This applies even if all other requirements are met and the Credit Bureau information is completely in order.
Requirements for a loan despite a temporary employment contract
Under certain conditions, it is quite possible to get a loan with a fixed-term contract. However, in most cases the banks will insist that the term of the loan does not exceed the end of the fixed-term contract. Otherwise, additional collateral would have to be available, such as a debt-free property or a loanable life insurance.
There is usually a good chance of getting a loan despite a fixed-term employment contract even if the applicant could find a guarantor or a co-applicant with a high income. It would therefore be an advantage for spouses or life partners if they submit the loan application together. However, this only increases the borrower’s creditworthiness if the co-applicant has a permanent and permanent employment relationship. In addition, his Credit Bureau information must be in order and must not have any negative features.
Approval, payment and repayment
Similar to any other loan, a loan is paid out in one amount despite a fixed-term contract of employment and then has to be repaid in regular monthly installments. Both the amount of the installments and the length of the term are determined in advance and cannot be changed at a later point in time. An exception would only exist if the borrower was also given the option of making special repayments or making early repayments. If the terms of the contract provide this, use should be made of it. So there is always the chance to repay the loan early.
A loan despite a fixed-term employment contract could also be taken out among friends or relatives. It can be repaid very flexibly and, if necessary, repaid in one amount. In addition, there would be the possibility to obtain a personal loan via one of the numerous credit brokerage platforms on the Internet. However, these platforms do not act as lenders themselves, but only bring together private lenders and private borrowers.
The search for a foreign loan, however, could be difficult. Although foreign lenders often do not provide Credit Bureau information, in return they place even greater value on a permanent and permanent employment relationship. In addition, the income must be so high that it could also be seized if the arrears persist.