You will have heard of the proxy loan, especially if you are considering applying for a loan to carry out your projects.
There are thousands of offers on the internet, and let’s face it, they often contain terms that are difficult to understand or are very long guides.
If you have little time and want to see clearly, read on. Here is the loan delegation how it works, in 5 points.
The proxy loan (or delegation of payment) is a form of loan granted to public and private employees . You can get it even if you have already requested a salary assignment : in this case, the agency you are contacting will retain an additional fifth of your salary, giving you a larger amount. Since it consists, in practice, in committing two-fifths of your salary for financing, the delegated loan is also defined as a double fifth or double assignment.
Regulated by articles 1269 and 1723 of the civil code and by specific ministerial provisions, the delegated loan also provides for protection for those who request it. Let’s see.
The repayment installment is certainly one of the first things to look at when requesting a loan: it is important to get more liquidity, but it is even more important to understand what the return conditions are for organizing your future. As with the fifth assignment, the delegated loan is returned with a direct deduction on your pay packet . Eliminated the problem of forgetting the payments.
The total amount of the deduction cannot exceed 40% of your salary. And, by law, the withholding must also be fixed , and calculated including all the expenses, including those of preliminary investigation (agency fees to pay the loan). You can choose to return the amount even in 120 months (10 years), according to your needs.
Also in this, the loan delegation looks a lot like the sale of the fifth. The agency will ask you to take out an insurance against the risk of losing your job and prematurely (with all the luck of the case). This is to protect you from all kinds of unexpected events.
Unlike other forms of financing that you have seen, the proxy loan does not have to be motivated. This means that you will not have to tie your loan request for a specific reason, having full freedom to use the liquidity received as you think.
You will not even need to provide deposits, guarantees or mortgages : it will be your salary (covered by insurance, as you read) to act as a guarantee.
Even the assignment does not include the obligation to justify your request, has a constant withholding rate and is insured. What is the difference then?
The delegated loan can be financed only with the authorization of the administration of belonging (both public and private), which will also verify the presence of other deductions on your pay envelope. Some administrations have entered into special agreements.