The transfer of the fifth of the pension or salary is a type of personal loan intended for employees and retirees. Through this mechanism, the employer or social security institution withholds the installments due directly from the applicant’s salary or pension and pays them to the lender.
What is the transfer of the fifth of the pension or salary
The transfer of the fifth is a personal loan aimed exclusively at employees and retirees.
Unlike a traditional loan, the installments are withheld directly by the employer or pension institution.
The monthly installment cannot exceed one fifth of the salary or pension. This loan has a fixed rate and the installments are constant, with repayment times that vary from 24 to 120 months. The transfer of the fifth is an unfinalized credit, so there is no need to specify how the funds will be used
.
Who can request the sale of the fifth
The beneficiaries of the sale of the fifth are:
- private employees
- civil servants
- retirees
Requirements for employees
To access the transfer of the fifth, employees must have:
- permanent contract
- Italian residence
- age between 18 and 63 years old
- insurable employment company
The company must also meet minimum eligibility requirements, such as a share capital above an established threshold and a sufficient number of employees.
Requirements for retirees
All INPS retirees, former INPDAP, Enasarco and other entities that issue the transferable share certificate, can request the transfer of the fifth. Holders of old-age, old-age and survivor’s pensions are included, in addition to disability and disability pensions if accompanied by other pensions
.
Requirements for retirees include:
- age not older than 90 years at the time the loan expires (in some cases the limit is 85 years)
- pension with minimum net amount net of transferable share
Funding institutions
The lenders of the loans with the transfer of the fifth are banks and financial institutions. Former INPDAP retirees can request the transfer of their fifth directly to the INPS up to 75,000 euros
.
How does the sale of the fifth work
To obtain the transfer of the fifth, it is necessary to sign a contract with a credit institution that provides the loan and establishes its duration and terms. The installments are withheld directly by the employer or pension institution.
The guarantee for the loan consists of severance pay (severance pay) for employees or a pension for retirees. During the repayment period, it is not possible to request advances on severance
pay.
It is mandatory to take out insurance that covers the debtor’s risk of injury, death or loss of work.
How to request the transfer of the fifth
The request must be submitted to the bank or financial institution. The procedure can be carried out remotely via SPID and digital signature or at the trusted credit institution
.
Request procedure
- Request a detailed quote from the financial institution.
- Evaluate income documentation.
- Sign a pre-contractual quote.
- Submit the documentation related to the severance pay.
- The creditor entity verifies the documentation and notifies the employer or the social security institution of its intention to proceed with the sale of the fifth.
- If everything goes well, the contract is signed and the loan is disbursed.
Contract and documentation
The financing agreement must include:
- amount and terms of the loan
- applied interest rate
- number, amounts and due date of installments
- global effective annual rate (APR)
- required guarantees and insurance coverage
Right of withdrawal
It is possible to withdraw from the contract within 14 days of signing by sending a communication to the lender. If the loan has already been received, the amount must be returned within 30 days from the notification of the withdrawal, with the accrued interest
.
Loan costs with the transfer of the fifth
The costs include:
- TAN (nominal annual rate)
- APR (global effective annual rate)
- Expenses of investigation
- insurance expenses
- bank fees
Duration and renewal
The duration of the repayment varies from 24 to 120 months. It is possible to renew the loan if at least 40% of the number of scheduled installments has elapsed
.
Advantages and disadvantages
Advantages:
- ease of obtaining
- high amounts for long working seniority
- lower ignition costs
- low insolvency risk
Disadvantages:
- need to take out compulsory insurance
- exclusion of categories with fixed-term contracts
Regulations
The sale of the fifth is regulated by Presidential Decree no. 180 of 5 January 1950, extended to private workers and retirees by financial law 2005 and 2006. Legislative Decree no. 141 of 13 August 2010 established the obligation to reimburse ancillary costs in the event of an early balance.
