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Borrowing with a temporary employment contract

Lenders take a wide variety of factors into account when determining whether or not to grant someone a loan and, if so, on what terms. A very important factor is the type of income. Lenders apply different acceptance criteria for each type of employment. According to most lenders, a temporary employment contract provides less security than a permanent employment contract and therefore borrowing with a temporary employment contract is not possible with every lender.

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Temporary employment with or without letter of intent

A distinction is made between a loan application where someone has a temporary employment contract with a letter of intent and someone who has a temporary employment contract without a letter of intent. A declaration of intent means that the employer puts a statement in writing in which he expresses the intention to convert the temporary employment contract to a permanent employment contract if the performance remains the same and the market conditions do not change. A number of companies only provide a loan for temporary employment if the employer has issued a letter of intent. Do you have a temporary contract and do you want to borrow? Then ask your employer whether they want to provide you with a letter of intent.

Borrowing more expensive or not possible

More often a credit is provided to someone with a temporary employment contract with a letter of intent than when the letter of intent is missing. There are also lenders that do provide a loan, but then use an interest surcharge. In other words: borrowing with a temporary employment contract is then more expensive than borrowing with a permanent employment contract.

Lower loan

It also happens that borrowing with a temporary employment contract is possible, even at the same interest rate, but then the maximum loan is lower. The maximum loan is then, for example, calculated with 70% of the income.

Other factors

Naturally, lenders look at more factors than just employment before they make a loan. The most important and most common factors in addition to the type of employment are:
  • level of income;
  • housing situation and housing costs;
  • Credit Registration Office (with a negative registration a loan is rarely granted);
  • family situation (a single person often has lower costs than a family with a few children);
  • age.