Can you get a caveat loan on your land?

What to do to get a loan

With your land for the home (renovation and furniture) and for the purchase of a car (both new and used) that in Italy are the masters (representing about 60% of total requests and 80% of the disbursed), and not forgetting that with the crisis more and more people are resorting to the liquidity loan to get to the end of the month, it is useful to know what the requirements are to obtain a caveat loan.

Which bodies are responsible for providing the loan, the purposes covered, and what guarantees are required for the disbursement of the loan.

The credit card, a consumer credit instrument with which it is possible to make purchases at participating establishments, and whose payment is made at a predefined frequency, usually monthly, in a single solution (credit card balance), or instalments with the addition of the amount of accrued interest (revolving credit);

The finalized loan, a form of financing strictly linked to the purchased good, which can be requested and obtained directly from the point of sale of the excellent and service (for example, funding for household appliances and electronic devices);

The Business Loans, the most widespread form of the financing in Italy, which provides for the investment of a pre-established sum, at a fixed interest rate, repayable in constant instalments; has the advantage of being a non-finalized loan, so its disbursement is not subject to the purchase of a specific good or service (unlike the finalized loan);

The assignment of the fifth, a type of loan that provides for the payment of the debt through deductions from the paycheck or pension, up to a maximum of one-fifth of the compensation itself, net of deductions;

Requirements for obtaining a loan

The requirements for obtaining a loan depend on the type of credit requested.

In general, the minimum requirements for all loans are:

In most cases, between 18 and 70 years of age (some banks and financial institutions also have an offer for older people);

A verifiable income;

Residence in the Italian territory;

Be the holder of a bank account.

Secondly, the bank will evaluate the loan granting based on its risk policies and the applicant’s creditworthiness. In the first case, each institution applies its risk policy based on statistical data in its possession (credit scoring) to keep insolvencies below a certain level. About the creditworthiness of the applicant, on the other hand, an assessment is made that takes into account the relationship between the repayment instalment and the applicant’s income which, generally, must not exceed 30%; also, the reports provided by the Central Credit Register (CRIF) are consulted, which record any missed payments or delays in repaying previous loans.

As an alternative to traditional types of your land, in cases where the applicant is registered in the CRIF lists, he can resort to the request for the assignment of the fifth which, proposing the appropriate guarantees from the employer for employees (or of the INPS for pensioners), allows you to receive a loan even in the event of bad credit history. However, it is essential to remember that the repayment rates for the fifth assignment are higher than those provided for by other forms of financing.

How to evaluate a loan

To choose the most convenient caveat loan, it is necessary to assess the economic conditions, considering the overall cost. However, this is not precisely a simple operation; below the two main elements

In addition to the minimum requirements, the financial institution can request ancillary guarantees. While usually the granting of a loan is not subject to the provision of real guarantees (for example, a mortgage), to limit the risk of insolvency often credit institutions require the presence of other subjects, the so-called co-obligors, who take on responsibility for the return of credit in the event of customer default.

A further form of guarantee to protect creditors is the presence of insurance coverage, mandatory in the case of assignment of the fifth (coverage on the life risk and employment risk of the applicant) and of a lifetime loan (coverage of damage from fire and outbreak of the immobile), optional in all other cases.