The Early Repayment of the Loan by Proxy in 5 PointsOn March 29, 2019 by Carol Miller
In order to carry out projects, especially if of a certain weight, it may be necessary to resort to financing. Among the various types available, the loan with proxy is a solution that can be accessed by employees with permanent contracts.
But is it possible, once requested, to extinguish it in advance?
Let’s find out how to do it in this post: here are the characteristics and methods for early repayment of the loan by proxy.
What is a proxy loan?
The loan with proxy is a type of loan (regulated by Article 1269 of the Civil Code) at a fixed rate and with constant installments, reserved for employees who have certain characteristics in relation to the legal category of the employer, the length of service matured and the type of employment contract. In general, they can apply for a loan with a delegation (or double-fifth) to state employees, a large part of public employees and private employees with permanent contracts, subject to verification of the case. The proxy loan can in fact be added to the Cession of the Fifth and the relative two installments can not exceed 2/5 of the salary.
This particular form of personal loan is reimbursed by the client through a payment delegation, issued to the Bank, of a share (up to a maximum of one fifth) of his salary. It allows to obtain an immediate liquidity that is added to that already connected to any loans in progress (with restitution through the assignment of the fifth salary ).
Preliminary evaluations, including on rates.
Analyzed the economic conditions of the loan and after having ascertained the effective possibility of using this type of loan, also evaluated the APR (Annual Effective Annual Rate) and the TAN (Annual Nominal Rate), verifying what the actual amount of the loan is installment that you will have to support. During the underwriting phase, make sure that there are insurances, provided by law, to protect eventual insolvency: life insurance policy and employment risk policy.
How it works.
As for the Cession of the Fifth, even in the case of a proxy loan, it is not required to specify the purpose. However, unlike the assignment of the fifth, it is expected that access to this form of financing is governed by a special agreement between the employer of the applicant and the granting institution unless it is discretionally authorized by the employer. The repayment of the loan by proxy takes place through the payment of the installment on the paycheck. The loan can be paid in installments up to 120 months. Recall that the sum of deductions for the loan by proxy and the assignment of the fifth can not exceed 40% of the paycheck.
The early repayment of the loan by proxy.
The early repayment of the loan by proxy is governed by various provisions on loans attributable to consumer credit. Early termination can be requested by submitting a specific application to the credit institution, attaching a copy of the identity document. Usually the credit institution replies within ten days of receipt of the request with the issuing of the extinction account, ie the total amount to be paid to extinguish the loan. You can pay by bank transfer on the Ditam indicated in the document sent by the bank, by the date indicated. The option of early repayment of the loan by proxy is exercised through the payment, on the part of the customer to the creditor, of the residual capital and, if explicitly provided for by contract, through a fee not exceeding one per cent of the residual capital. It is understood that consumers who pay off their loan early are in any case entitled to a reduction, by the lender, of the total cost of the credit due, for an amount equal to the amount of interest and costs for the remaining duration of the loan contract. In particular, this reduction refers to the portion, at the time of early repayment, of the interest not accrued, the insurance premium not taken and other costs relating to the residual life of the debt.
The employer must also be informed of the early extinction, because we are talking about a double fifth that includes a deduction from the paycheck. The credit institution, received the balance for the early extinction of the loan by proxy, will send to the applicant and to the employer a release certifying the closure of the loan, in order to stop the monthly deductions on the salary.