What is the assignment of the fifth? When can the renewal of the transfer of the fifth salary be made? Renewal of assignment of the fifth of the salary: the advantages.
The renewal of the assignment of a fifth of the salary or pension is an increasingly used formula to finance one’s personal needs. What exactly does it consist of?
Simply by renegotiating the loan in progress, extinguishing it , in favor of a new one so as to have new liquidity available. In practice, a new assignment of the fifth is required: a part of the sum obtained is destined for the extinction of the previous loan and the remaining part is additional liquidity. But first, for the uninitiated, let’s explain who can access this option and in general what is the assignment of the fifth.
What is the assignment of the fifth?
The assignment of the fifth of the salary or pension is a particular type of financing: as the name itself indicates, this is repaid by retaining up to a maximum of one fifth of the salary or pension, therefore no more than 20%, consequently the sum granted it will be proportional to the applicant’s income.
It is a fixed rate loan, and the maximum duration allowed is 120 months.
Employees, both public and private sector workers with permanent contracts, and pensioners can access it.
In fact, at the same time as the loan application with the Transfer of the Fifth , you will have to present documents that attest to your income , then a paycheck or pension slip.
Generally no real estate or property guarantees are required.
Since it is not a finalized loan, it is not required to justify the destination of the sum disbursed: the loans with the Transfer of the Fifth of the salary therefore represent an effective solution for those who need liquidity.
Furthermore, at the time of signing the contract for the transfer of the fifth with the financial company, an insurance must also be taken out by law on life and job loss risks .
But, if you already have an ongoing Transfer of the fifth and need additional liquidity? Well, you have the opportunity to make a renewal of the assignment of the fifth of the salary.
When can the renewal of the transfer of the fifth salary be made?
There are very specific laws in this regard. In fact, according to the legislation (art. 39 of Law 180 of 1950) the renewal of the assignment of the fifth of the salary or pension is possible when at least 40% of the debt has already been repaid .
So if for example your assignment of the fifth has a duration of 120 months (10 years), you can renew it starting from the 48th month (after 4 years).
The only exception are loans with an initial term equal to or less than 5 years: it is in fact possible to renew the fifth even before having paid the 40% of the debt, provided there is a renewal of the assignment of the fifth decade, therefore the duration of the new fifth and with a duration of 10 years.
Recall that, if you need additional liquidity, there is also the double fifth option, which allows you to commit a larger part of the salary, precisely the 2/5.
Renewal of assignment of the fifth of the salary: the advantages
Generally, this is a convenient operation since, in addition to providing additional liquidity, it allows to renegotiate conditions and interest rates.
In any case, pay attention to any preliminary costs and financing costs that are not included in the extinguishing statement.
Another cost linked to the renegotiation of the transfer of the fifth is the insurance one, in this case it is very important to specify that reimbursement of the unused insurance premium is also required.
The renewal of the Transfer of the Fifth of salary or pension becomes particularly advantageous for customers if, by renegotiating the loan in progress, they are able to obtain lower interest rates compared to the current Transfer of the Fifth. This mainly depends on the historical period in which the loan is stipulated and is linked to the trend in interest rates.
After analyzing the costs, it is possible to decide whether the operation is convenient for you or not, and if so, proceed with the request for a quote for the transfer of the fifth. How to get it? Just chat with us for free!