More and more workers are given a fixed-term contract for the first two years after changing jobs. Furthermore, time limits are permitted if the employment relationship is linked to a specific project, the end of which is foreseeable at the end of the employment relationship.
For athletes, artists and scientists, special regulations allow the conclusion of temporary contracts in many other cases. The fixed-term contract often makes it difficult to borrow. In a broader sense, taking out a loan from a freelancer or self-employed person is a loan without an open-ended employment contract, whereby they prove their income on the basis of their bookkeeping or the most recent tax return.
The easiest is the repayment until the end of the contract
Financial institutions can easily issue a loan without an open-ended employment contract if the loan term does not expire longer than the end of the current contract term. In this case, the time limit increases the security of the loan because it precludes operational termination.
Borrowing with a repayment until the current contract expires is primarily considered for artists, athletes and scientists, while employers often divide the permissible time limit for new contracts and offer several successive employment contracts, so that repayment is hardly possible until the current employment relationship expires is.
Borrowing beyond the current time limit
If customers cannot pay off their loan by the end of the fixed-term contract without an open-ended employment contract, they look for a bank that refrains from submitting the contract. The status of an employment relationship usually does not appear from a wage or salary statement, so that financial institutions only become aware of the time limit when the employment contract is requested. In many cases, it is sufficient to send a current pay slip for the lending, some financial institutions even waive this when lending quickly and with low loan amounts.
Payment by installments in mail order business is also easy as a dedicated loan without an unlimited employment contract, since dealers only ask for a salary slip or proof of employment if the order values are unusually high. With a loan without a permanent employment contract, it is also important that the loan customer takes into account a possibly lower income after the contract expires when planning the monthly installments and either decides on a longer loan term or saves money for later payments.