Called double fifth or delegated loan, this type of financing is, in fact, a personal loan at a fixed rate, not finalized, aimed at employees of the state, public and private sectors (excluding pensioners), who already hold a transfer of the fifth. Recall that the assignment of the fifth of the salary is a particular type of loan to be extinguished with the transfer of portions of the salary up to the fifth of the amount of the same assessed net of withholding taxes. So what is the difference? The amount of the related loan which, with the double fifth, doubles. The amount can even reach 80 thousand dollars and, in general, its disbursement has rapid times: to obtain it, it is estimated 10-15 working days.
The go-ahead from the employer
The repayment takes place through a direct deduction from the monthly salary by the employer, who will undertake to pay it to the credit institution, according to two conditions: the amount of the installments has a maximum ceiling linked to the salary received monthly (allows to exceed the fifth part of the monthly net salary, reaching two fifths of the salary, for an amount not exceeding 40%). And, contrary to what happens with the transfer of the fifth, the employer has a decisive role and can decide whether to authorize or deny this type of loan. Almost always, in combination, the subscription of an insurance policy linked to the loan is also required, against the risk of death, serious illness and loss of job. The cost of the insurance is inserted within the monthly installment,
To be able to apply for it, it is necessary to have an employee contract, for an indefinite period, and to have accumulated a rather substantial severance pay. This is because the double assignment of the fifth can be extinguished in advance or can also be renewed, following a certain bureaucratic procedure. In addition, there is the possibility of resigning from work during the double-fifth repayment period: the remaining portion is retained by the severance pay, which for this reason must be substantial.
Doors also open to fixed-term contracts. But in the latter case there is a constraint linked to the maximum repayment term of the loan, which cannot be higher than that of your employment contract.
In general, the duration of the assignment of the double fifth can range from a minimum of 12 months to a maximum of 120 months, depending on the amount of the loan, the age of the applicant and the income received. The documents needed to obtain a double-fifth loan are a valid and recognized identity document, such as a passport, identity card or driving license, tax code and last paycheck. Compared to private individuals, civil servants can benefit from special advantageous economic conditions, in fact, banks and financial institutions are used to offering them convenient loans thanks to the numerous agreements stipulated with ministries, bodies and public administrations.
Five advantages of double fifth
- It allows you to request an additional sum, even if you have already requested a loan with a transfer of the fifth.
- In this way it is possible to obtain a higher sum compared to other forms of financing.
- The delegation of payment can be provided at bank branches by check or bank transfer.
- It can also coexist with other payroll deductions, provided that the sum of the deductions does not exceed 50% of the net salary.
- It can be renegotiated in advance by recovering un accrued interest.