In addition to the pure credit for civil servants, there is also the civil servant loan, which differs from this in that it offers a number of additional benefits. The civil servant loan is a special loan because, in addition to the actual loan, there is also additional insurance in the form of life insurance.
This combined loan for civil servants has advantages but also disadvantages. The civil servant loan basically consists of a normal installment loan for civil servants, which is already cheaper than a loan for other professional groups, which is extended by capital-forming life insurance.
With this additional protection, the interest rate can fall again and at the same time, the repayment of the loan at the end of the term can be ensured without any problems since the life insurance is paid out congruently at the end of the loan and the loan is therefore repaid.
Official Loans – Benefits
The advantage of this civil servant loan is that the loan itself does not have to be repaid, but only the interest accrued per year – the loan amount itself is not reduced by the lack of repayments, but that should not be the case as it is due to the Disbursement of capital-forming life insurance is covered.
This can have decisive advantages, especially for renting property owners, since the monthly repayments are not directly tax-deductible, but only the interest and borrowing costs – but these do not decrease with a civil servant loan during the term since the monthly payment does not pay off the loan but paid into life insurance.
The additional protection of the loan with life insurance, in addition to the security of the civil servant salary, can be used to obtain further interest advantages, since an official loan for the bank represents the proverbial network with double bottoms.
If at the end of the term, the life insurance company has generated a surplus in excess of the loan amount, this surplus will be paid out in full to the borrower, which represents an additional profit, which must, however, be taxed at 100%.
By taking out life insurance, relatives are also covered in the event of death, so that if the borrower dies, they are not overwhelmed by the debt, but can pay it off with the payment of the life insurance.
Official Loans – Disadvantages
The disadvantages of a civil servant loan are that the contributions to capital-building life insurance can be higher than a normal monthly rate.
Since the contributions are only paid into the capital-forming life insurance but are not used directly to repay the loan, the interest burden does not decrease until the end of the term.
In the case of an installment loan, however, the interest burden often behaves asynchronously, which means that the interest component predominates at the beginning of the term and steadily decreases towards the repayment component towards the end of the term.
A civil servant loan can
Therefore, be significantly more expensive than an installment loan or loan for civil servants due to the significantly higher interest burden – especially if the life insurance does not offer a significant excess at the end of the term beyond the disbursement amount intended to repay the loan.
Since the contributions to capital-forming life insurance are primarily based on the age of entry and state of health, the contributions to capital life insurance, especially for older civil servants, can be far above the level of the saved credit rates.
Conclusion: A civil servant loan is particularly worthwhile for young civil servants or employees in the public service who want to build up assets in the form of real estate for rent. The overall higher interest burden, which can be deducted from the tax on renting, and the higher monthly contributions to capital life insurance, can be offset by the possible tax benefit and ideally even become a real financial advantage.