Delegated loans: characteristics and requirements to obtain them
Loans with payment delegation (double assignment)
Loans against delegation of payment (or with delegation or double fifth) have seen considerable development in recent years thanks to the various circulars issued by the Ministry of the Treasury, which have helped to establish the basic rules and clarify certain aspects related, in particular, to the limits of duration, transferable portion, charges and procedures.
Regulatory payment and news delegation
The legislation that applies to the loan with payment delegation is the general one that applies to loans (therefore anti-usury provisions. Age limits, determination of the amount and access conditions), with the addition of some specific references. These are dealt with in article 1269 (specific to the payment delegation) and article 1723 (which concerns the revocability of the mandate). The articles of the civil code are obviously indicative, therefore it is in the various circulars that more specific and practical provisions have been given.
These circulars start from 1996 with the regulation of the entire subject and the provision of some rules including the obligation to stipulate an agreement between the employee’s administration and the bank or financial intermediary. Another fundamental rule is linked to the payment of a fee to be borne by the lender for the reimbursement of expenses incurred by the Administration in relation to the withholding tax (cost of personnel and IT processes).
It should not be forgotten that until 2010 the salary-backed salary (which must exist in order to be able to apply for a loan with payment authorization) constituted a possible form of financing exclusively for public employees. Hence an operation based on a specific convention. This aspect is then diminished following the decree law that extended the access of the fifth assignment to all employees, including private employees and pensioners (in this case above all by virtue of INPS agreements).
What is it and how is it working?
In general, loans with delegated payments allow a greater sum to be obtained than the simple salary or pension assignment. The maximum total installment will in fact be equal to 2/5 of the net monthly salary (also called double fifth).
In the event that the delegation is stipulated with a sale of the fifth already in place and the existence of other forms of deduction on the salary (also in the case of attachment), the Treasury has established, through circular 37 of 2003, that the maximum transferable portion is equal to half the salary, while the single portion of the proxy cannot exceed 1/5.
So for example on a net monthly income of 1000 USD, if the worker has: 200 USD for the assignment of the fifth and 200 USD for the attachment of the fifth of the salary, the delegation of payment that could be on the card equal to 200 USD (ie 1000 of 1000 USD) on reduces to 100 USD. This is because cumulatively we cannot go beyond 500 USD a month, which is, in this case, half the salary. If, on the other hand, the same worker has only a sale of the fifth of 200 USD, then they can be obtained as a loan with a proxy of 200 USD, because cumulatively 50% of the income of 1000 USD is not exceeded.
It should also be said that this circular also states that this limit (of 50% of net income) can be exceeded only if the administration of the employee gives his assent recognizing the need. However, there have been various judgments of the Cassation which in practice do not allow its implementation, setting the limit of 50%, which is considered to be the minimum of “subsistence”, in a rather rigid manner.
Duration and requirements
The maximum duration is the same as for the fifth sale, or 10 years. In fact, circular 654 of 2006 has definitively clarified that in the absence of an express limitation of the duration in the conventional delegations, the duration of the payment delegations remains the one envisaged by the parties in the individual loan contracts (art. 1372 cc). Also for the requirements, please refer to those provided for the salary assignments (which may have variations depending on whether they are civil servants, private individuals, retirees, etc.).
Target audience and request methods
From the formal point of view, the same subjects can request it, who have the possibility of requesting the assignment of the fifth, such as employees, public, state and private companies. For those who can apply for Inpdap multi-year loans, there is the possibility of also requesting the transfer of the double fifth, with the same conditions and methods.
Normally, delegated loans are required to meet certain needs dictated by the need to support an assignment of the fifth already in progress (fifth + delegation) because a very high sum is needed.
The loan with delegation, for the rest, has the same characteristics as the fifth assignment, first of all the possibility of financing even the protesters and the bad payers
The methods of request, the use of modules or specific questions, also follow the same rules and the same documents required for the assignment of the fifth.
With regard to the latter, however, there is a substantial difference: the employer who cannot avoid accepting the assignment of the fifth (dealing with the payment of the installments through the amount withheld upstream), in the case of the loan by delegation can be exempted from this task. Even the assessments on the opportunity to grant financing, by banks and financial institutions and the insurance companies involved for the compulsory insurance component, become more detailed. So if you think that the transaction is not “safe” enough, the loan application with proxy can be more easily denied, compared to what happens instead with the sale of the fifth itself.
- Maximum rate of assignment equal to 50% of salary, in the presence of other deductions in addition to salary-backed loans
- Maximum duration 10 years
- No motivation or justification for spending to apply for funding (here the exception is the long-term Inpdap loan which is granted only with appropriate certification and demonstration of use)
- Fixed and constant installment for the entire duration of the loan
- Financing obtainable also from those who have been subjected to foreclosures, protests or other loans in progress
- Obligation insurance against risk of use and death
- In general, the cost of the delegation is greater than the sale as the employment risk insurance is more expensive.
In general, the cost of the delegation is greater than the sale as the employment risk insurance is more expensive.