Compared to normal loans, special civil servant loans usually come up with much better terms. In no other business does credit rating play such a strong role. With civil servant loans, financial institutions can expect to put their cash in safe hands, regardless of whether it’s an installment loan or a loan for a property. Not only civil servants, but also high-earning graduates are particularly welcome customers, who have to pay significantly lower interest rates because of their safer income compared to people from precarious jobs.

Credit counseling for civil servants

Credit counseling for civil servants

In this article, the editors of explained the advantages of civil servant loans and explains who besides civil servants can benefit from the unbeatable low interest rates. We also deal with a misunderstanding and explain the difference between civil servant loans and civil servant loans. Last but not least, we examine the comparison of the providers, where there are currently the best conditions.

Difference civil servants and loans

Difference civil servants and loans

There is a high likelihood of confusion between civil servants ‘loans and civil servants’ loans. They are used by the lenders partly synonymous, partly different for their offers. This blurs the line between the two offerings, which originally referred to two different products. This is possible because both the term “civil servant loan” and “civil servant loan” are not protected. To eliminate any ambiguity, we would like to use the two words with a different meaning.

In the classical sense, a public sector loan is a repayment-free money lending, which is simultaneously coupled with insurance. This is usually a life insurance or a pension insurance. The customer then only makes a monthly payment for the premium and interest of the insurance. The monthly discount is in most cases significantly lower than with standard installment loans. This payment will continue until the end of the insurance if the customer pays the pension or endowment insurance. With this amount the consumer can now settle his credit debt or use surpluses for livelihood or old-age provision.

On the other hand, civil service loans are self-contained products that are not covered by insurance. Civil servants’ loans are, in principle, ordinary loans that are only available to certain professional groups, ie civil servants, in part academics and civil servants. The special feature of civil servant loans is that they are awarded on the basis of the good credit of the professional group in most cases, particularly good terms.

Benefits of civil servant loans

Benefits of civil servant loans

That officials have to pay very low interest rates and thus usually make a favorable business, has already angeklungen. Of course, officials should also compare carefully and pay particular attention to the effective interest rate, which includes all processing and termination fees. So they can be sure that they will actually find an offer that is significantly better than an average product for the average consumer. After all, it should be worthwhile for the bank to have virtually no risk of getting back the money for a secure job for life. Payment problems due to a job loss are extremely rare.

In addition, civil servants ‘credits also provide the advantage, thanks to the advance of trust, that civil servants’ loans with particularly long terms can be concluded. For instance, civil servants can spend more time settling their debt.

Civil service loans also have some advantages over other consumers. These include not only the low installment payments and the long maturities of 10 to 20 years. The banks are also securing the low interest rate over this long period of time, so that the civil servants have great planning certainty. They receive inexpensive loans for relatively small sums of around 10,000 euros, but also for larger amounts over 50,000 euros. Another plus: Customers can make a special repayment at any time, so that the term is shortened. Compared to civil service loans, your own family is also financially prepared if something bad happens to the credit and policy holder.

Here are the advantages of a civil service loan at a glance:

  • benevolent rating of creditworthiness
  • particularly favorable interest rates
  • longer terms possible
  • altogether more favorable conditions, than the average citizen

However, for civil servant loans also two requirements have to be met. This form exists only in combination with a capital life insurance or pension insurance. Especially life insurance policies are considered less lucrative today. In addition, already completed loans must be rescheduled before the conclusion of a civil servant loan. However, this does not apply to zero-percent financing and mortgage lending, and auto loans are often excluded.

Civil servants also for employees?

As a rule, not only employees with permanent civil service can benefit from the special conditions. Also probationary officials are accepted by many financial institutions – as well as pensioners who have a civil service career behind them. In addition, civil servant loans are often open to civil servants. Professional soldiers also belong to the group that can benefit from the discount. However, the exact rules may vary from bank to bank. The last word is always the financial institution. Nevertheless, it is worthwhile for the consumer to inquire about the special conditions at several companies. For civil servant loans, the conditions for the degree are similar. In addition to civil servants and professional soldiers, civil servants are also included in the target group, insofar as they can not be dismissed and the employment relationship has existed for at least five years. In addition, this opportunity exists for a civil service loan also for academics. You must also have been working for at least five years, continuously for one and the same employer.

Civil servant loans for different professions

There are now different loan offers for very specific target groups. The General Civil Service Bank, for example, specializes in special professions. It offers specially tailored civil servant loans for soldiers, teachers and police officers. Other banks offer less specialized loans but, like the General Civil Service Bank, give better terms to civil servants than to average employees. A comparison in an online calculator definitely makes sense and quickly reveals where the differences lie and which offer represents the best for you personally.

Here is an overview of special civil servant loans:

Officials profession particularities
soldiers For soldiers, a distinction is made in the lending between time-guards and professional soldiers; Timekeepers often receive the loan depending on the service time.
Teacher Teachers distinguish between civil servants and public service teachers. Often, however, both occupational groups are granted the same civil service loan.
police officers The different ranks of the police make no difference. Civil servants in most cases still do not fully benefit from special conditions as civil servants.

Best civil service loans in comparison 2019

Which official loans ultimately fit best to their own situation, can be found, inter alia, through online comparison portals and inquiries at the financial institutions. There is no general recommendation, since one’s own credit rating is based not only on the employment relationship but also, for example, on the previous payment behavior for loans. The cheap official loan can therefore vary from person to person.

The cheapest civil service loans are currently waiting with effective interest rates of less than two percent. It should be noted that the effective interest rate can vary considerably depending on the creditworthiness. Very small is the margin between the best and the worst effective interest rates, for example at PAR Bank. For a civil service loan over 10,000 euros and a comparatively long period of seven years, the 1822direktbank is in our test in June 2018, however, in the best case still minimally cheaper. Depending on the purpose of the use, that is, for example, as real estate financing or the payment of a new vehicle, the results are different.