The assignment of the fifth is a fixed-rate loan, with repayment by constant monthly installments.
The main characteristic of this category of financing is that the repayment of the loan does not take place through installments paid monthly by the applicant: the latter are deducted directly from the salary or pension, for an amount that, as a rule, can reach up to one fifth of the salary or pension in fact.
Another peculiar feature is that it is a loan protected by specific guarantees provided by the customer, represented by the severance pay (liquidation) in the case of employees and by the pension in the case of pensioners.
Another guarantee is represented by the insurance coverage (required by law) which must always be present in this type of operation, against life risk and/or employment risk.
The presence of these guarantees is the factor that allows banks and financial institutions to grant loans with great flexibility in the assessment of requests and also in the presence of any previous credit problems.
Below we illustrate the features of the loans offered:
You must be an employee (private, public or state) with a permanent contract or a retirement pension. As far as employees are concerned, it is necessary to have a length of work such as to allow an adequate level of TFR (liquidation) accrued.
Amounts and durations available
The amount does not have a fixed maximum limit: it is determined according to the level of remuneration (or pension) and the accrued severance indemnity (liquidation). To increase the maximum amount financed, it is sometimes possible to increase the amount of the monthly installment up to a maximum of two-fifths of the salary: in these cases, one speaks of “double fifth”.
The durations can reach up to 120 months.
The monthly repayment installment is withheld directly by the employer, who provides to pay it to the financing institution. In the case of pensioners, it is withheld from the pension amount.
The guarantees of this type of product are represented:
- from the installment: deducted directly from the pay packet (or from the pension);
- from the accrued TFR (or pension), bound in favor of the financing institution;
- from the compulsory insurance, on the life and/or employment risk, to cover the amount possibly exceeding the accumulated severance pay.
Evaluation of requests
Any acceptance remains the responsibility of the Financial Institutions and is normally subject to the verification of certain conditions concerning the applicant’s job position (effective availability, company solidity, coverage of the operation by the insurance company, etc. ). No evidence is given, in the evaluation phase, gentle to the possible presence of previous credit problems.