Nowadays you can hardly find an employer who gives a permanent contract from the outset. Rather, one initially works with temporary contracts that are happy to be concluded over a year. However, employees with such contracts also have a life in which they have to meet financial obligations or where it is impossible to avoid making a purchase.
If the savings are then insufficient, a loan must be taken out. But is a loan with an annual contract even possible? And what requirements have to be met for this?
Nothing is impossible
A loan with an annual contract is generally possible. However, only under very specific conditions. The banks only grant loans if there is a permanent employment relationship. If the employment contract is limited to one year, this does not mean that the employee is in the trial period. The employment relationship is firmly agreed. But only for a year.
If you take out a loan with an annual contract, you have to make sure that the loan can be repaid within this year. As a loan with an annual contract, only a small loan comes into question, which is repaid within a few months. The bank will not approve anything that goes beyond the current employment contract. So you shouldn’t have too much hope for a big loan. But sometimes it is the small sums that can make a big difference and are completely sufficient for the borrower.
What should be funded?
If you know exactly what you want to finance, you may also be able to make an installment payment agreement with an online retailer or local retailer. Because many goods that you buy nowadays can be financed. Directly from the dealer and with small monthly installments. If you want to buy a new TV, you can ask the dealer for financing directly. He is usually not interested in how long the employment contract lasted. It is more important that an income is generated at all. And that’s a given.
Thus, the type of financing would also be a good alternative to a bank loan. You save a lot of effort and do not have to explain why the employment contract was limited to just one year.
And if you don’t want to go down this path, a second co-applicant can still ensure that the loan becomes a reality. If he has an open-ended employment contract and receives a high income, then he is perfect for applying for the loan.