The loan with delegated payment, also known as ” double fifth “, is a particular form of non-finalized loan, with a fixed rate and constant installment, which has many similarities with the assignment of the fifth but, alongside a assignment, it allows to have access to even higher amounts.
However, it is not a type of credit open to all.
It can be requested only by employees with paychecks (state, public and private) and under certain conditions. Self-employed workers and pensioners are therefore excluded from this form of credit.
As in the transfer of the fifth, the reimbursement takes place in a period of time ranging from 24 to 120 months and all takes place by means of direct deductions in the pay packet, the amount of which can reach up to 20% of the salary net of withholding taxes by law for social security and tax purposes. Therefore requested in the presence or in conjunction with a transfer of the fifth, it allows you to commit up to 40% of the salary (precisely for this “double fifth”), so that the total amount that can be requested can reach even double that which can be obtained with the only assignment.
Let’s take an example.
In the case of a monthly salary of $ 1,600, with the transfer of the fifth the maximum sustainable installment is $ 320, which for a maximum total of 120 months allows you to repay up to a maximum of $ 38,400 (including interest).
On the other hand, turning to the delegation of payment, the monthly payment, as we have seen, can commit a total of 40% of the salary, in this case $ 640. In this way it will be possible to repay up to $ 76,800 in 120 months, double the amount compared to the sale alone.
A significant advantage of this form of financing, in common with the assignment, is the fact that it is a single signature loan, which does not require third party guarantees as the paycheck itself acts as collateral. It is therefore also accessible to those employees who in the past have had solvency problems such as protested, foreclosed or reported to Crif as bad payers.
To further protect the credit, moreover, the loan with delegation is accompanied, like the assignment, by a compulsory insurance coverage on life and employment, so that, in the event of death or loss of the job, the creditor will be repaid in any case without having to retaliate on the heirs or assets of the newly unemployed.
But be careful: in the delegation of payment, unlike in the transfer of the fifth, the employer has the possibility to refuse to collaborate (risk more present in the case of private employees).
In fact, if in the transfer of the fifth the parties actually involved in the loan agreement are only the applicant and the creditor entity (the employer can only take note of the financing and cooperate obligatorily), in the delegation of payment also the employer of job (the delegate in fact) has a say and, if he is willing to accept the assignment, he must explicitly provide a formal written consent to carry out the deductions and the monthly payments instead of his employee. In the event of his refusal, funding cannot take place.
Why apply for a loan with delegation?
The loan with delegation is certainly an interesting solution for employees as it allows to request and obtain high liquidity. It can also be requested in the presence of a transfer of the current one, for example when the requirements for being able to renew it have not yet been reached or if high sums are required. On the other hand, it will not be possible to request a loan with a proxy if you own, in addition to a transfer, even a small loan.
What are the requirements and procedures for applying for a delegated loan?
As we said previously, the first indispensable requirement is the paycheck : therefore, you must first be an employee. But things change depending on whether you are state / public or private employees. Let’s see how.
– State and public employees
This category of employees (ministerial workers salaried by the MEF, public administration workers registered on the NoiPa online platform, employees of the Armed Forces), having the State as their employer, is considered by the creditors as a low risk category. In addition, this category of workers often benefits from special agreements between banks and their institutions. It is therefore necessary to inquire in advance about which banks or financial institutions have an agreement in order to know where to turn. Furthermore, by virtue of these agreements, the public and state employee benefits from subsidized rates and a reduction in administrative and tax burdens.
Another requirement to possess is that the employment contract is open -ended. It is possible to apply for a loan by proxy even in the presence of a fixed-term contract, but this implies that the loan cannot in any way have a duration longer than that of the employment contract. You will therefore inevitably have access to a lower credit.
Once the agreement has been identified, the following documents must be presented at the time of application:
- identity card;
- fiscal Code;
- last two payslips;
- authorization to delegate the authorizing officer of the salary.
Once the entire required documentation has been submitted, the preliminary investigation phase begins, which usually ends in about ten days with the disbursement of the agreed amount by means of certified check or by bank transfer in c / c. Turning to affiliated financial companies that provide online service, the times could be even shorter.
It may be useful to know that for public and state employees, in some exceptional cases, it is possible to go beyond 40% of retention in the paycheck, even reaching 50%, but this is at the discretion of the Body that salaries the employee and will be the reasons for which additional liquidity was requested were taken into consideration (for example, the request will not be accepted in the event that money is needed for the purchase of luxury, superfluous or consumer goods).
Still in the case of public and state employees, the presence of life and employment insurance coverage is not necessarily mandatory: in fact, if the agreement in force provides for it, the bank and employee can both produce a written declaration in which they demonstrate that they are aware of the risks of the loan linked to death or loss of employment and the loan may have followed even in the absence of the policy.
– Private employees
Greater restrictions are envisaged for this category of employees, as the reassuring guarantee represented by the State is lacking. In fact, not all private employees can access the loan by proxy, but only those who meet the following requirements:
- be employees of a company belonging to one of the following corporate reasons:
- be employed by a company with at least 15 units;
- have a permanent employment contract;
- have a working seniority to possess a severance indemnity set aside sufficient to guarantee the credit and / or pay funds for an additional pension.
In addition to requiring more restrictive requirements, financial companies or banks generally tend to provide private employees with lower figures than those made available to public employees, also due to the different amounts of wages received. And the insurance policy is always mandatory precisely because we are talking about a job that even in the presence of an open-ended contract, however, cannot be defined as fixed.
In the case of private employees, the bank or financial company need not have previously entered into agreements with the company to which they belong: from time to time the credit institution and the insurance company will assess the reliability of the company in question and decide whether the financing can be granted to the employee or not. It may also happen that an employee who cannot be financed for one bank may instead be for another.
Is it possible to renew a loan with delegation?
Like the transfer of the fifth, the loan with delegation can also be renewed, obtaining new liquidity and prolonging the repayment over time. However, specific times must be respected:
- if the loan with ongoing delegation has a duration of 60 months or less, it is possible to renew it at any time bringing it to 120 months;
- in the case of a loan with a proxy in progress for more than 60 months, in order to request the renewal it is necessary to have paid regularly at least 40% of the installments due.
Let’s take an example.
Imagine that we have a 48-month delegated loan in progress. In this case, being a loan with a duration of less than 5 years, I will be able to apply for renewal at any time. The important thing is that the new duration of the renewed loan is equal to and not less than 120 months.
If, on the other hand, my current loan with delegation has a duration, for example, of 84 months, therefore greater than 5 years, I will be able to apply for renewal only after having paid the first 34 installments, i.e. after having returned at least 40 % of the amount paid.
However, renewal is not automatic. The request can be refused for various reasons:
- refusal of the company to assume the delegation of payment;
- the applicant is close to retirement age, therefore he can no longer take advantage of this form of financing as pensioners are excluded from it;
- during the loan, foreclosures took place against the applicant, such as to reduce the possibility of having further payroll withholdings;
- the company is no longer included in the fees necessary to be considered assumable by the insurance company.
How much does the loan with delegation cost?
Due to the obligation of insurance coverage, this form of financing has its cost. In addition, there are administrative charges on the part of the applicant towards both the bank or financial company that manages the case, and towards the entity or company that assumes the delegation of payments. These costs are reduced in the case of a loan with delegation addressed to public / state employees as the stipulation of dedicated agreements allows lower rates to be checked and accessory costs to be canceled or at least reduced.
Why retirees don’t?
One might ask: why Social Institute pensioners cannot access this form of financing? After all, they have the pension slip and the social security institution as an excellent guarantor. The answer is to be found in the fact that the state protects pensioners by preventing them from being over-indebted.
Each year the ago (Compulsory General Insurance) establishes, based on the cost of living and inflation, the minimum amount below which a pension must never fall. For example, this value in 2020 was $ 515.07. Allowing a retention on the 40% pension slip would not be sustainable. This is why for pensioners it is possible to access only the assignment of the fifth and often the effectively transferable portion is less than 20%. In case of greater need, they can rely on a personal loan or a mortgage loan.