Goverment Agency loans
Loans are a very useful tool in order to be able to change one’s liquidity condition. In an era where even if you have a pension or a fixed salary, money seems never to be enough, using guaranteed systems such as Goverment Agency loans can be a great lifeline for the public worker too. Thanks to these financial products it will be possible to have immediate availability and direct access to credit.
What are Goverment Agency loans?
The National Institute of Social Security for Public Administration Employees was created in 1993 with the merger of a number of entities. He had different duties, among the most relevant there was that concerning the collection of social security contributions and the disbursement of pensions.
It was also possible to receive small loans, with interest rates facilitated by the Goverment Agency. In 2011, the institution was incorporated into Social Security, which replaced the old institution in order to issue a series of small and medium-sized secured loans. But what are the advantages of this type of financing? And who are the subjects who can receive it?
Who can apply to Goverment Agency
Goverment Agency loans are accessible only to those who are enrolled in the former Goverment Agency system of Social Security and therefore a subject who is a state or public administration employee.
This type of financing is based on a fund called the Unitary Management of Credit and Social Benefits, which was established in 1996 and is now managed by Social Security. Each have through this form of guarantee are granted a series of small loans or multi-year loans that are considered subsidized for state workers. Not only is the procedure very rapid, given that it is carried out directly by the assistance body, but it is also guaranteed.
The withdrawal of the installments is in fact made directly from the subscriber’s salary or pension. If we add subsidized interest rates and rapidity in obtaining financing, we consider the importance of such a financial product. In addition, the Goverment Agency has signed over the years a series of agreements with finance and credit institutions which therefore allow access to a loan or loan, even different from that envisaged by the institution. The agreements concern not only the maximum amount that can be paid according to age, but also a particular type of interest rate. The cost of a loan is focused precisely on this element.
Before making an application for an economic amount, it will be necessary to evaluate what the cost of returning the loan is.
Interest rates: what TAG and APR are and which are the best
Whether a public body such as Goverment Agency, now Social Security, an affiliated financial company, or a credit institution, there is always an economic return behind a loan.
To simplify we can make a simple example. If you ask a credit institution for a loan of $ 1000, not only will you have to repay this sum, but there is also a cost that goes in proportion to a series of factors, such as amount, duration of the loan and number of installments. There is talk of TAN and APR.
The new European banking legislation has established that it is mandatory by law, always specify these two values in the information sheets. But how to extricate oneself in the middle of the percentages that appear on billboards or on the contract when taking out a loan? Before talking about the interests of Goverment Agency loans, it is important to carefully consider these two acronyms to evaluate their value.
In a simplified way, the TAN is identified as the nominal annual rate. With this term we therefore consider the pure interest that is calculated on the loan that has been granted. In this case we mean the money that is recognized directly to the finance company for having lent money. The TAN is not paid in a single solution but according to an amortization plan that divides the value according to the different installments.
In the initial installments, the interest to the institution will always be returned first and then the remaining paid-up capital. Some loans allow the cancellation of the costs of the TAN, but not of the APR. This acronym identifies the nominal effective rate, which is a virtual reality which includes all the overall costs of the loan, including the opening, closing and costs of the file that must be faced by the applicant.
This second element is to be evaluated effectively in order to consider an advantageous loan or loan.
Interest rates for late 2018 and 2019
Below we will analyze the two types of financing envisaged with the relative reference interest rates:
- small loan : the loans that can be made to Social Security, Goverment Agency employees with an amount not exceeding $ 5000 are considered. As the term used says, it is a small sum of money that can be convenient in order to face immediate and unforeseen expenses, such as those of a medical nature and that will have to be returned in convenient installments of 12 months or even up to 48 months. Given the very small amount, no particular type of documentation is required to demonstrate the use of the money. The maximum amount payable and the time of refunds are directly proportional to both the age of the person and his salary. Thanks to the institution’s subsidy system, interest rates appear very favorable. The TAN is equal to 4.25% while the APR must be added 0.50% as additional administration and risk provision expenses, reaching a maximum of 5.01%.
- multi-year loan : in the case of loans with a higher number of years as in the case of 5 or 10-year loans, the installments can be from 60 to 120 monthly. The interest rate is equal to 3.50% while the APR varies according to the age and the amount requested. The installments cannot in any case exceed 20% of the salary amount;
- agreed multi-year loans : we talk about multi-year loans. In this case the Goverment Agency benefits from the agreements stipulated with finance and credit institutions, as well as banking institutions in order to grant this type of financing. The amounts can also be substantial reaching 69.000 / 75.000 $. The maximum amount is strictly linked to the age of the subject and the wages or pension received.
In this case, based on the type of agreement, it will be possible to have a facilitated TAN and APR. In any case, the installment can never exceed 1/5 of the salary in order to guarantee the applicant the possibility of returning the loan comfortably.
The 2019 advances on Goverment Agency loan interest rates
In the Goverment Agency regulation published in 2018 all the specifications for the request for a small loan or a multi-year one have been listed. In the same document there is also an indication of the type of interest based on the financial product being facilitated.
The regulation would also appear unchanged for 2019, thus confirming the percentages of the nominal and effective annual rates. Even if the Cream Bank expects a rate increase expected for the beginning of the new year, those who can take advantage of an Goverment Agency loan will not see any form of modification to their facilities.