Civil servants and civil servants are very welcome customers at banks. There are many reasons why this is so, which will be discussed in more detail below. Most credit institutions offer special offers to civil servants and civil servants, so-called civil servant loans or civil servant loans. These financial products are our own products that are specifically geared towards this target group.
The term civil servant loan is not a protected term, so that basically every credit institution – and also insurance companies – can sell different forms of loans and credits under this term. If you are interested in a civil servant loan, you should take your time and compare the different offers.
Civil service and borrowing
Civil servants and civil servants are very popular customers with credit institutions. The reason for this lies in their employment relationship and some basic personal values and attitudes that make this target group so interesting for credit institutions. The strongest argument is and remains the employment relationship between the civil servant and the civil servant in relation to the state.
For the credit institutions, this meant that the borrower had very good credit scoring as a civil servant or civil servant. This is a numerical value (score) that is determined on the basis of statistical analyzes and represents a person’s creditworthiness. Credit institutions try to determine the creditworthiness of a customer using an automated credit scoring process. Different factors such as the length of the customer relationship, the place of residence, the profession and possible security play an important role.
Safe job as an official by the state
Civil servants and civil servants can achieve a particularly high number of points, particularly in the professional field. The state is considered one of the safest and most solvent employers. In other words, the state does not go bankrupt so quickly, pays the salaries of civil servants and civil servants on time and regularly, and rarely fires its employees. Civil servants in particular have an advantage over all other borrowers.
Officials are regularly appointed life officials after three years after entering the civil service. After five years at the latest, they must be appointed in accordance with the Federal Officials Act, otherwise they must be released. However, once you have made the leap into the civil service career, you are rarely fired (e.g. due to crimes or other official or private misconduct or lack of probation as an official), especially if the state already has a lot of time and money in it the training of the officials has taken place.
Officials receive their salaries regularly at the beginning of the month. Due to the tier system of belonging to the public service, the pay increases to the next higher tier as well as possible promotions. For credit institutions, this means that civil servants will regularly and long-term meet their obligations under a loan agreement. Otherwise, up to the allowance, the payments can usually be attached without major problems if the borrower does not fulfill his obligations.
Public service employees in the western wage area (old federal states) only acquire a position similar to civil servants ( non-resignation ) after 15 years in the public service – but not in the eastern wage area (new federal states) – but here, too, the state regularly has to The training of his employees rarely invests and separates from his specialists.
In addition, every civil servant has the option of being an official if they meet certain requirements. Officials must also meet these requirements before they are hired in order to be able to enter the civil service career. These include orderly economic conditions and physical fitness and they must be healthy. Credit institutions also know this, of course, so that the risk of default among civil servants and civil servants due to dismissal or illness compared to other target groups is particularly low.
Civil servants and civil servants: Many guarantees
Due to the relatively high salaries of civil servants and the salaries of civil servants on a par with civil servants, this special target group generally lives in upscale residential areas, which also has a positive effect on scoring. In addition, many civil servants and civil servants often have appropriate collateral (e.g. house / condominium, one or more cars, securities, life insurance, cash reserves ) that can be used by the credit institution to meet their claims in the event of a loan default.
Certain values and attitudes of civil servants and civil servants with regard to their lifestyle are also not unimportant for credit institutions. Credit institutions know that security, especially financial security, plays an important role for those who choose to pursue a civil servant career or a civil servant career. Those who join the civil service generally avoid risks rather than seeking them. For credit institutions, this means that such borrowers tend to take little or no financial risks, probably invest money conservatively or with limited risk, save regularly instead of hitting everything upside down at the beginning of the month and lead a rather low-risk, orderly life – both in financial terms in terms of health as well.
In addition, the relationship between the bank and the borrower has generally existed for a long time, since the tendency to change is rather low. Another important factor for the credit institutions is the mostly high to very high level of education of civil servants and civil servants, who will therefore quickly find a new job even if they are laid off in the private sector. Against this background, the creditworthiness of civil servants and civil servants, which is calculated on the basis of the scoring values, among other things, is regularly very good and the probability of default on the loan is correspondingly low.
Special offers for civil servants and civil servants
Credit institutions and insurance companies can make public sector employees and civil servants attractive offers at relatively low interest rates or contributions due to the very low (credit default) risk. These special offers from credit institutions (such as civil servant loans) can be used by all civil servants, probation officials, life officials, civil servant teachers and academics, officials from the judiciary, post office, telecommunications, rail, police and fire services, as well as judges and professional soldiers and pensioners are coming.
As a rule, these offers are mostly consumer loans between 10,000 and 100,000 USD. The term of these loans is very flexible. These are usually very long terms, usually between ten and 20 years. The interest rate is relatively low in view of the very low risk compared to other borrowers. The interest on an official loan is stable and tied in the long term. The monthly rates are sometimes up to 50 percent lower than those of other offers. The repayment of such a loan is also very flexible.
Special repayments are possible at most banks at any time. In the event of death, appropriate insurance (life insurance) is offered at a very reasonable price, so that the borrower’s family is not additionally burdened by the repayment of the loan in the event of death. In some cases, credit institutions even refrain from providing Credit Bureau information on presentation of a certificate of appointment and proof of salary from an official. Often, an official loan is a combination of a fixed-term loan and a mortgaged life insurance that is taken out when the loan is taken out.
The life insurance is loaned in the amount of the loan, so that only the interest and the insurance premium accrue during the entire term of the loan. Such a loan is repaid at the end of the term by the life insurance. Was agreed profit sharing at the conclusion of the official loan, what should be done in any case, the excess from the capital life insurance is paid to the borrower at the end of the term, otherwise it falls to the lender.