Sale of the fifth 2016: the news in force since January
How have the loans changed in 2016? A question that interests many Italians looking for a financing solution. The main changes concern the sale of the fifth year 2016, which saw the entry into force of new rules on rates and the provision of credit to pensioners.
Indeed, the threshold rates relating to the Taeg to be applied to loans on the sale of one fifth of the pension have been updated. On 5 January, Social Institute announced that, following the decree of 21 December 2015, the Ministry of Economy indicated the new global average effective rates (TEGM) which banks and financial intermediaries will have to comply with from 1 January to 31 March. 2016.
But how does this impact on loans to retirees? Before going into detail it is essential to clarify what the loans on the sale of the fifth of the pension are.
Transfer of the fifth to pensioners: what it is and how it works
The assignment of the fifth is a particular type of personal loan which provides for the reduction of the monthly installment directly from the applicant’s pension or salary. The interest rate is fixed and the maximum expected duration of the loan is 10 years.
While for workers it is the employer who undertakes to cut the installment from the salary and pay it to the bank or financial provider, for pensioners the repayment of the monthly payments takes place through the social security institution.
As far as guarantees are concerned, a life insurance policy is envisaged to cover the risk of the debtor’s lack of priority. Coverage that the pensioner is obliged to sign in order to be able to access the assignment of the fifth (for employees, insurance against employment risk is also required).
In any case, as the name suggests, the loans on assignment of the fifth 2016 provide for a maximum monthly installment equal to the fifth part of the pension received by the applicant.
Sale of the fifth Social Institute: the new rates in force
But let’s go back to the transfer rates of the fifth 2016 set by the Ministry of Economy for the period from January to March. The new average rates are 12.2% for loans up to 5 thousand USD (usury rate 19.25%) and 10.99% for loans over 5 thousand USD (usury rate 17.74 %).
For pensioners, on the other hand, the threshold rates set for the Taeg vary according to the age of the applicant and the amount paid. In detail, for pensioners up to 59 years of age who apply for loans of up to $ 5 thousand the rate is 9.09%, while for loans with a higher amount the rate is 8.71%.
In the same way for pensioners between 60 and 69 years of age who apply for loans of up to 5 thousand USD the rate is 10.69%, while for loans with amounts over 5 thousand USD the rate is 10, 31%.
Finally, we find pensioners aged between 70 and 79 years, for whom the loan rate of up to $ 5,000 will be 13.29%, while for higher amounts it is 12.91%.