The assignment of the fifth salary / pension is a secure, convenient and reliable financing solution. This is a type of personal loan, with a repayment plan of up to 120 months, aimed at facilitating access to credit for retired and state and private employees on permanent or fixed-term contracts, if the duration of the loan falls within the expiry of the contract of work.

The customer reimburses monthly the credit received through a plan of monthly, constant, fixed rate installments and the amount of which can not exceed the value of one fifth (hence the name “Cession of the Fifth”) of the total amount in payroll or on the pension bill.

To find the financing that best meets your needs, evaluate each component of the operation: here are 8 useful tips on the Cession of the Fifth.

A particular form of personal loan

A particular form of personal loan

The transfer of the fifth is a fixed rate loan with repayment in constant installments. The monthly amount of the installment is deducted from each paycheck or pension, directly from the employer or pension institution that pays it to the financial institution that provided the credit to the client. The maximum sum can never exceed 20% of the applicant’s net income, ie one fifth of the monthly net salary (net of all withholding taxes).

Also in the case of the pensioner, the maximum amount of the loan installment (transferable portion) is determined on the basis of the pension itself, net of tax and social security withholdings, and in such a way that the minimum pension established annually by law is safeguarded. If the customer has more transferable pensions, the transferable quota is determined on the basis of the total pensions received. Finally, it should be noted that the Cession of the Fifth can be applied to all pensions, with the exception of some particular types such as, for example, pensions and social benefits, civil disabilities, monthly checks for assistance to pensioners for incapacity and other checks. / pensions.

The difference compared to the traditional personal loan

The difference compared to the traditional personal loan

The assignment of the Fifth and the Personal Loan differ according to the method of payment of the credit obtained. While in the case of a personal loan the customer provides to repay the debt to the lending institution through, generally, the automatic debit on the current account or with the postal order, in the Transfer of the Fifth payment is made through deduction of the salary / pension and is regulated by a direct relationship between the lender and the employer of the client / pension institution. Moreover, sometimes, for the granting of a personal loan, the figure of a guarantor / co-signer of the loan is required. In the case of the Cessione del Quinto these types of guarantees are not provided.

The main advantages of the product

The main advantages of the product

The Cessione del Quinto is characterized by some advantages which consist of:

  • possibility to request up to € 75,000;
  • possibility of allocating funding to the desired purpose;
  • fixed, constant and fixed rate installments;
  • convenience of reimbursement through the deduction in the paycheck or on the pension of the share transferred;
  • reimbursement up to 120 months (10 years);
  • possibility to access the credit even in case of foreclosures, protests or other financial problems;
  • no need for special guarantees (guarantors, sureties or mortgages) due to insurance coverage, which the customer is obliged to underwrite, against life risk (for all types of customers) and against loss of employment (only for employees).

Who can request this type of financing

Who can request this type of financing

All state and public employees:

  • with a permanent contract;
  • residing in Italy;
  • from the age of 18 up to the statutory retirement period, or until the working age limit is reached (at the end of the retirement period the loan can be repaid or transferred to the pension);
  • that have certain characteristics with respect to the legal situation of the employer, the age of service and the type of contract.

All employees of private companies:

  • with a permanent contract;
  • fixed-term if the duration of the loan falls within the expiry of the employment contract;
  • residing in Italy;
  • from the age of 18 up to the statutory retirement period, or until the working age limit is reached;
  • condition of insurability of the company where it lends its working activity;
  • that have certain characteristics with respect to the legal situation of the employer, the age of service and the type of contract.

All retirees:

  • holders of a pension;
  • residing in Italy;
  • aged 85 or over at the end of the loan repayment plan.

The documentation necessary to instruct a loan with the assignment of the fifth salary / pension

The documentation necessary to instruct a loan with the assignment of the fifth salary / pension

  • Employees:
  • identity document and tax code;
  • last two paychecks, CUD and salary certificate (issued by the employer);
  • further documentation may be required during the investigation.
  • retired:
  • identity document and tax code;
  • last two pension slips, CUD and pension certificate (issued by the pension institution);
  • further documentation may be required during the investigation.

Some peculiarities of the Cessione del Quinto financing

Some peculiarities of the Cessione del Quinto financing

  • The employer / pension institution is obliged to accept the request for transfer of the fifth salary / pension as this type of credit is understood as a right.
  • The loan may be terminated at any time by the customer, as with other forms of credit, by recovering the amount of interest not yet accrued at the time of early repayment.
  • The transaction can only be renewed if the first two fifths of the original duration of the loan have elapsed (40% of the amortization plan), while loans with a duration of 5 years or less can be renewed even before 40%, but only with a ten-year sale and when this is done for the first time.
  • The renewal being in effect a new request for assignment of the fifth, which occurs by extinguishing the previous loan, is subject to approval by the paying agency.
  • The loan with proxy is a type of loan that can be added to the assignment of the fifth salary and the two installments can not exceed 2/5 of the salary.

Evaluate each component of the operation: 8 useful tips on the Cession of the Fifth

Evaluate each component of the operation: 8 useful tips on the Cession of the Fifth

To identify the loan with Cessione del Quinto that best meets its needs, it is advisable to carefully evaluate each component of the transaction: from the amount financed to the amount of the installment, from the TAN to the final APR of the transaction. Here are some tips for evaluating a Cession of the Fifth contract (information reported in the document IEBCC – Basic Information on Credit to Consumers):

  1. Verify the total amount of credit understood as the sum of the amounts made available to the customer net of any cost, expense, charge and commission.
  2. Check amount of the monthly payment and duration of the entire repayment plan.
  3. Verify the total amount owed by the customer as the amount of principal borrowed, plus interest and costs associated with the credit.
  4. Check the applied interest rate (TAN – Nominal annual rate), fixed for the entire duration of the loan.
  5. Check the APR (Annual Effective Annual Rate) which expresses, in percentage terms, the total cost of the credit and which allows the customer to make a comparison between the various offers available.
  6. Check the types of insurance coverage provided.
  7. Check other costs arising from the credit agreement and the expected costs in case of delayed payment of the installments of the loan.
  8. Ensure the conditions of other relevant legal aspects such as, for example, the right of withdrawal and early repayment.

In addition to following these tips, remember also to always carefully view the above mentioned elements and all the others in the document “Basic European Consumer Credit Information”. These indications are relevant to access the proposed credit solutions in a truly conscious manner. In this sense, it is advisable to always ask the institution where you have contacted a copy of the financing contract suitable for the stipulation, in order to have all the time for further study of the case.

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