Borrowing money for civil servants is cheaper
Borrowing money for civil servants is cheaper than for those who are not civil servants. But if you are not in the public service and your partner is, then you still qualify for the favorable conditions that an official’s loan entails. Even if your partner does not work full-time with the government, you can still use this scheme.
Why this has favorable conditions I will explain later in this article and of course also refer to the specialist in this area so that you can immediately request a free quote. The favorable conditions are of course due to the fact that the interest for civil servants is lower.
Why is the interest rate lower?
The lender believes that someone who has a permanent job with the government has this job for life. This means that the income stated in the application will certainly still be the same in five years’ time. However, the lender must also pass on some of the risk. You may be confronted with a divorce, illness and so on.
Nevertheless, the interest rate for civil servants remains slightly lower than for ordinary mortals. That the lower percentage is only fractional and not always applicable, I will show later in a graph. Research has also shown that (semi) civil servants pay off their loans better than others.
Redemption and refinancing without penalty
If you have the opportunity to make additional repayments during the term of the loan so that you can get rid of the loan earlier, this is no problem at all. You always make extra repayments without penalty and you can decide independently. If you still have financial obligations that do not fall under the cheaper civil servant rate, you can have these obligations transferred immediately with a new application.
Think of an outstanding amount on a credit card, a balance at a mail order company, or a red balance at your bank. The latter in particular is interesting to take with you right away, because the interest on being red is on the high side.
But is it really cheaper now
In my search for a low interest rate for civil servants, I ended up on a website that was specially designed for that purpose. This website shows a lowest interest rate of 4.4% at the time of writing. However, if I go to the website of Nationale Nederlanden (NN) and view the lowest interest there, then I will be served 4.5%. Now the mutual conditions are slightly different. You can clearly see this in the overview below.
As you can see, the difference in interest is minimal with only 0.1%. However, in this example you can see that the maturities are different, you may have to pay a higher interest rate for the shorter term of the civil servant loan, which is not included in this overview because this data was not provided to me. Only when requesting a quote will you be able to see your final interest.
This depends on more factors than just your monthly income. The advantage of a quotation is that you do not have to make use of it, if you put the quotation aside without taking action, it will simply expire and you are not committed to anything.
More discounts for officials
Finally, you can view various providers of a revolving credit on the specially arranged overview page and request a quote if you wish. Officials have more benefits than just a small discount on their loan. An article from Binnenlands Bestuur shows that civil servants also receive discounts on travel, insurance, car maintenance, health insurance and much more. Shall I become a civil servant anyway?