Following the repeal of the social security institution for public employees, the granting of INPDAP loans now falls within the competence of INPS. Retirees and public employees who need a loan can apply directly to INPS for a small loan or a multi-year loan or contact one of the affiliated credit institutions.
INPDAP loans: what they are and who can request them
With the expression “INPDAP loans” we mean the loans that were disbursed by the national social security and assistance institution for public administration employees. The institute was established in 1994 and suppressed in 2011, following the approval of the so-called Save Italy Decree. As of January 1, 2012, all the activities that were the responsibility of INPDAP have passed under the control of INPS, including loans.
Employees and pensioners registered with the INPS Public Administration can apply for a loan directly from the social security institution or from one of the banks that have signed agreements with the institution. The INPDAP loans are granted in favorable economic conditions. The offer of financial products dedicated to public sector workers, pensioners, and their families is divided, in particular, into:
- small loan;
- multi-year direct loan;
- guaranteed multi-year loan.
The small loan
The small loan is a personal loan available to workers and pensioners enrolled in the unitary management of credit and social services, also known as the credit fund. If you fall into this category, you can obtain a loan for an amount equal to a maximum of eight months, to be used to meet unexpected expenses or a need for liquidity.
Small loans have a duration of between one and four years and their amount depends on the net salary or the net pension received monthly and on the presence of other loans in progress. If you have previously requested a loan with the assignment of the fifth, you can obtain a loan equal to one month for the loan with annual maturity, two months for the one with a two-year maturity, three months if you choose the repayment in 36 months or four months if you choose to repay the loan in 48 installments.
If you have no other deductions in progress, you can double the loan amount, which will therefore be between a minimum of two and a maximum of eight months. Since retirees can, by law, give away a maximum of one-fifth of their monthly income, the actual loan amount may be less than the maximum obtainable on the card.
You can collect the loan in cash or by crediting your current account. The loan must then be repaid to INPS by paying monthly installments of a constant amount, starting from the second month following the one in which the loan was credited. The installments include a portion of repayment of the loaned capital and a portion of interest. The TAN applied to the small loan is currently 4.25%, to which administration costs must be added, equal to 0.5% of the capital lent and the risk provision premium. The rate of the latter varies according to the maturity of the loan and the age of the person requesting it.
If you have requested a small loan and when you have already started repaying the loan, you need more money, you can apply for the loan renewal. This option is possible after at least half of the contract term has elapsed.
The loan application form can be downloaded from the INPS website. Once completed, it must be delivered to the Administration of which you are employed, which will deal with the electronic transmission of the application to the social security institution.
The multi-year loan
The multi-year loan is granted for a period of 5 or 10 years. The financed amount is calculated starting from the transferable portion of the pension or salary, a portion that can be equal to a maximum of one-fifth of the monthly salary.
Direct multi-year loans
Direct long-term loans are reserved to those who are employed under a contract of indefinite duration and have completed at least four years’ service. Those with a fixed-term contract can apply for the loan provided that the repayment is concluded by the expiration date of the employment contract and that the TFR fund is used as a guarantee for the loan. The interest rate applied to the loan is 3.5%; in addition to this rate, if you apply for a multi-year loan you will have to pay the premium for the risk fund and bear the administration costs.
The multi-year loan can be requested only in the cases provided for by the regulation, therefore when the loan is requested it is necessary to specify the purpose for which it is intended. The funding request must be submitted electronically and must be accompanied by a medical certificate of sound and robust constitution and by documents certifying the state of need and the purpose of the expenditure. Depending on the reason for which the loan is requested, the INPS regulation lists the documentation that must be attached to the application. Some of the cases provided for by the regulation are the purchase of a car, the execution of maintenance work in one’s home or condominium level, the birth or adoption of a child, the move, the incurring of costs for dental treatment and dentistry, the coverage of costs related to natural disasters, the construction or purchase of a house.
After 2 years from the beginning of the repayment period for five-year loans or 4 years for ten-year sun coast insurance loans, those who have obtained the loan can request its renewal.
Guaranteed multi-year loans
The guaranteed long-term loans are granted by banks and finance companies affiliated with the INPS. They are characterized by the fact that the parties can count on the guarantee of the social security institution if the person requesting the loan dies before completing the repayment, loses his job without the right to a pension, or has his monthly salary reduced.
You can apply for this type of financing if you have a permanent employment contract and if you have at least 4 years of service. The loan can have a duration of 5 or 10 years and must be repaid in installments equal to one-fifth of the net salary. Those who request a guaranteed multi-year loan must take into account the payment of interest in favor of the credit institution that grants the money and administration costs and the risk fund premium in favor of INPS.
No proof of expense is required to apply for a guaranteed multi-year loan. To obtain the loan you will have to submit the application to the Administration of which you are employed in 4 copies, attaching a medical certificate of sound and robust constitution. The Administration will send the application to the financial intermediary who has the task of defining the contract proposal and, once received back, the Administration will send the loan request to INPS for final authorization.
The agreed loans
In addition to guaranteed multi-year loans, banks and financial companies affiliated with INPS can grant public employees and pensioners loans on favorable terms. Workers, retirees, and their families can apply for a loan in the form of a personal loan, a loan with the assignment of a fifth, or a mortgage. INPDAP loans for teachers, employees, and employees of Public Administrations are non-finalized loans, therefore there is no need to justify the request for money in any way.
The documentation to be submitted to the financial institution differs according to the type of loan requested and the age group of the applicant, while the economic conditions of the loan – i.e. the interest rate applied and the ancillary costs – depending on the policies of the bank or of the financial choice.
To stay up to date on all the news regarding INPDAP loans, the regulations that govern them, interest rates, and the most convenient loan solutions, You can quickly obtain the money you need to carry out your and your family’s projects: a small loan to have a little more liquidity or a multi-year loan to buy or renovate a house or for one of the other reasons indicated in the INPS regulations.
INPDAP loans: forms
The forms for requesting a small loan or a multi-year loan are available in the Forms section of the INPS website. In the same section, you can download the form relating to the presentation of the medical certificate and the one required for early repayment of the loan.
How to calculate the transferable share
As we have seen, INPDAP loans have a fixed term and an installment that can be equal to a maximum of one-fifth of the salary or pension. The maximum loan amount, therefore, must be deducted from this information.
Before applying for a small loan or a multi-year loan you will need to proceed with the calculation of the transferable portion of your net salary. If you are an employee this is equivalent to 20% of the net salary, while if you are a retiree you will have to take into account the minimum pension safeguard level (for 2017 equal to 501.89 euros).
To determine the amount of the loan starting from the amount of the installment and the duration of the loan, tables have been drawn up to facilitate the calculation. The tables for INPDAP loans are contained in the handbook prepared by the social security institution. The handbook also allows verification of the number of administrative expenses to be incurred and the amount of the premium due for the provision for risks. From the reading of the tables prepared by INPS relating to INPDAP loans, it is also possible to obtain the coefficients useful for reconstructing the amortization plan for small loans and multi-year loans and the net amount of the loan, calculated by deducting interest expenses, for the fund risks and administrative.