Unfortunately, life is becoming more and more expensive and the savings for most people are becoming less and less. Many are reliant on bridging financially difficult times with a loan. However, bank loans are always tied to certain criteria that must be met for a loan. One of them is a permanent employment contract. However, under certain circumstances it is also possible to get a loan without a permanent employment contract.
Small loans easily possible
The banks are very often willing to grant a small loan even with a temporary employment contract. It is important that the loan term and the length of the term are roughly the same. If the borrower has sufficient income and otherwise fulfills the criteria of the bank so that the loan can be repaid in the appropriate time, the loan is granted without an indefinite employment contract. It is important on the one hand that the applicant’s private credit checker is in order.
On the other hand, the relationship between income and expenditure should be such that the loan installment is paid. So if you can foresee that you need a loan, you should make it at the beginning of the temporary employment contract, because that is where the chances are best. The closer the end of the employment contract gets, the more difficult it will be to get a loan without a permanent employment contract without further guarantees.
Larger loans require additional collateral
However, small loans are not always sufficient to realize projects. However, if you need more money, which is also associated with a longer term, you have to offer the bank additional collateral in order to get a loan without a permanent employment contract. A security for the bank is, for example, the naming of a guarantor. This guarantor agrees to pay the installments of the loan should the borrower not be able to service the installments.
Of course, this presupposes that the guarantor is in turn creditworthy, ie has a permanent employment contract, no private credit checker entries and not too high expenses. A partner who only works half a day or not at all cannot guarantee. If there is such a guarantor, which is also accepted by the bank, there is nothing standing in the way of the loan without an unlimited employment contract. If the fixed-term employment contract is converted into a permanent employment contract, there is an option to release the guarantor from the loan agreement so that he can no longer be sued after the dismissal.