Salary Backled Loan

The salary-backed loan (assignment of one-fifth of salary or pension) is a type of loan to be repaid through direct deductions from salary or pension, which cannot exceed one-fifth of the remuneration assessed net of tax deductions.

Currently, this form of credit is available to civil servants, employees of private companies, and pensioners.

Salary-backed loans are very advantageous for several reasons:

• the rate is fixed
• the installments do not change
• the installments are not repaid by the applicant but by their employer (or the social security institution in the case of pensioners)
• it is all automatic: the relevant amount is deducted directly from the salary

The duration of the contract for salary-backed loans varies from 24 to 120 months. For permanent employees of private administrations, the duration of the assignment must not exceed the term of employment and the date of retirement; for public and state employees, on the other hand, it is possible—with some limitations—to transfer the assignment to the pension.