Traditional reasons for the conclusion of an annual employment contract are employment relationships between artists and athletes as well as long-term representations for pregnancies and lengthy illnesses. Today, companies are increasingly awarding an annual contract as the last extension within the permitted two-year fixed-term contract for new employment relationships. http://www.athenasite.net/best-payday-loan-consolidation-where-and-how-to-consolidate-payday-loans/ for further clarification
Annual contracts are unfavorable for borrowing because a fixed-term employment contract does not offer the lender security for an income sufficient to repay the loan until the end of the agreed repayment.
Does the time limit have to be specified?
A loan can often be taken out in spite of the annual contract, since the lender only requires the presentation of a certificate of earnings and not that of the employment contract. The applicant must always provide information requested in the credit agreement honestly, even if it is not checked. Without a corresponding request in the loan application, nobody has to point out an existing annual employment contract.
In any case, a loan can only be applied for despite the annual contract if the borrower assumes that he can meet his repayment obligations. This is the case if the credit customer expects an extension of the employment contract as an employee, or an extension of the contract as an athlete or employed artist or the rapid finding of a new engagement.
Some lenders already guarantee the right to change the repayment agreement later in the loan agreement. These are to be preferred for a loan despite an annual contract, since the borrower knows for sure that if the employment contract is not renewed, he can temporarily lower his installments.
Who pays a loan despite an annual employment contract?
A loan despite an annual contract as a small loan with a short term is easy to obtain if the repayment is made within the current time limit. The agreement of installment payments in the mail order business is not restricted by the one-year employment contract, especially since mail order companies only ask the employer in exceptional cases.
If the account availability framework does not already exist, most banks set up a credit line for employees after three salary entries without checking the type of employment contract. However, since the overdraft facility is expensive, it should only be used for short-term financial shortages.
The simplest feature for credit approval during a temporary employment contract is that the bank does not request any evidence of permanent employment. The personal credit meeting in the branch of the house bank can also lead to a loan approval, since the bank clerk takes into account both the impression from the conversation and the previous account management when making the loan decision.
In the case of loans brokered on the Internet between private individuals, the credit decision is often made on the basis of personal criteria, with many private lenders prefering to grant credit if the borrower is finding it difficult to obtain a loan from banks.