If an employee has been unemployed for a long time and has finally found a new job, then a trial period must generally be completed. Even people who have finished their training and are starting their careers start with a trial period. However, there will be problems with a loan during the trial period. Banks usually only lend money to customers if there is a permanent contract.
The reason banks see this is that neither the loan seeker nor they themselves know what will happen after the trial period. Does the employee receive a permanent contract, a fixed-term contract or become unemployed again? This scenario is too uncertain for banks and they are very reluctant to take a loan during the trial period.
The trial period is an arbitrary thing that comes from the employer. A trial period helps employers and employees get to know each other better. A trial period has been agreed so that both sides have the same opportunities. In this way, the employee and the employer can dissolve this relationship at any time. The trial period lasts about six months in most cases.
Before banks approve a loan, they thoroughly examine the customer’s economic situation. In addition to the income, which must be above the garnishment exemption limit, employment is also checked. If the employee is still working during the trial period, banks require collateral. The risk of default seems too high to them. Proof of creditworthiness is checked using proof of salary, bank statements and a copy of the employment contract.
Impeccable Credit Bureau is just as important as permanent employment and a sufficiently high income, and must not contain any negative entries.
The cautious approach is explained by the fact that the employee becomes unemployed again after his trial period. Income is reduced from one month to the next. Many customers who were in a similar situation could then no longer pay their loan because the money was simply missing. If credit is taken into consideration during the trial period, then the customer must also act with foresight. He can do this, for example, by setting the installments so that they are still payable in the event of unemployment.
The amount of the loan should also be reconsidered. Maybe a small loan amount is enough to pay for the necessary things. In such a case, banks without collateral will not approve the loan during the trial period. Unless the customer can name a property, a loanable loan, a second borrower or a guarantor. Banks often also offer residual debt insurance which pays the installments due when unemployed.
Here, however, the customer should read the conditions of this residual debt insurance very carefully. Because the protection often only takes effect after a certain time or it only takes effect with reservations. This type of insurance is also very expensive. The premiums are added to the loan amount completely, which not only increases the loan amount but also the customer pays interest for the insurance. Anyone who now needs a small loan generally does not actually need any residual debt insurance if he sets the installments in such a way that they can be paid even under difficult conditions.
The reasons for a loan during the trial period can be varied. Most of all, a car is needed to drive to work. If the employee opts for a high-quality car, he could deposit the vehicle letter with the bank. She sees the letter as security and the loan could be approved during the trial period.
Is the overdraft facility an option?
If the worker has an urgent need for money and the amount is not too high, the overdraft facility could be a solution. If there are no abnormalities in the account movements, the bank will leave the credit line intact. According to how high the income was, there might already be a disposition of up to 6,000 euros or even more. This can be used to pay for or buy something.
However, the overdraft facility is very expensive, it has an interest rate in the double-digit range, there are banks that charge up to 15% of interest. If the customer then exceeds the credit line granted, the bank can calculate an additional 5% interest. The overdraft facility is actually intended for short-term use. If it can be quickly offset, the overdraft facility could be the solution for the loan during the trial period.
If the employee then receives his permanent employment contract, the overdraft facility can be compensated or converted into an installment loan. In any case, this creates a better interest rate.
But what if the overdraft facility is already exhausted and the bank refuses to increase it? The option to get a loan during the trial period is to pay the loan within the trial period. However, high installments then have to be paid, which not every employee can pay. If there is a possibility not to pay the loan during the trial period, a guarantor could be named to serve as credit protection.
The guarantor can come from the family, but must be solvent. This means that if the borrower defaults on the loan, the guarantor is obliged to do so. Therefore, he must have a sufficient income to guarantee that the loan installments can also be paid. Likewise, the Credit Bureau must be impeccable, there must be no negative entries in it.
The bank will require a joint and several guarantee, which equates the guarantor with the debtor. If the customer no longer pays, the guarantor is immediately taken into recourse. The same thing happens with a co-applicant, who, however, is jointly and severally liable from the start.
Credit Bureau free?
If the Credit Bureau of the loan seeker is bad, however, there are negative entries in it, then a Cream bank will not grant a loan during the trial period. In this case, there are the Credit Bureau-free loans that are heavily advertised on the Internet. However, these banks also require permanent employment, which must have existed for at least one year.