Contract loan is an offer for people who are employed on the basis of śmieciówek. Unfortunately, they are also often associated with low earnings. In addition, they constitute a potential obstacle in the process of applying for a loan or a bank loan. On the other hand, freelancers – programmers, copywriters or graphic designers – also work on such contracts, and their income is not among the lowest. Can they also, having a mandate contract, have problems when applying for, for example, a mortgage? Let’s find out whether work on a commission contract is really such a ballast, or maybe a small obstacle that we can easily bypass.
What is a mandate contract?
A commission contract is a form of employment where the employer = client commissions the performance of a specific job at a specified time, for which the contractor will receive a certain amount of money. Until 2016, it did not generate mandatory contributions paid by the employer, but currently, if it is the contractor’s only source of income, the employer is obliged to pay social security contributions and health contributions also from the mandate contract.
A significant change was introduced by the January 2019 provision, which set the amount of the minimum hourly rate for commissioned work.
This form of employment is beneficial for the employer, because usually the employee does not have a guaranteed vacation or minimum pay. It is not covered by the provisions of the Labor Code and the Civil Code.
The time at which the order is carried out usually has a specific time frame. However, you can sign a mandate contract for an indefinite period. However, it should be borne in mind whether the activities performed by the employee have not become permanent (regular working hours and performing the same activities all the time).
Contract commission – not so scary
Contrary to appearances, the mandate contract or contract for specific work is not as harmful to the employee as it is supposed. These are flexible forms of employment that leave both employees and employers a lot of freedom. These types of civil law contracts allow you to earn more money than on an employment contract. The employer is not obliged to pay all contributions for the employee. However, financial institutions’ reluctance to cooperate with persons employed in this way may result from two issues.
Most often, young people (often students) work on the mandate contract, whose banks, in principle, place less trust than those clients whose age has allowed them to gain an established professional position. He does not give her a commission or work, because at any time the parties who have signed such a contract can terminate the employment relationship. And although in the case of an employment contract the situation is very similar (the difference is in the length of the notice period), banks say top-down that the person who owns it has earned a lot of hard work, therefore you can trust him and grant him a loan .
What constitutes creditworthiness?
At the same time, the professional situation of a potential borrower is just one of the factors that financial institutions take into account when calculating creditworthiness. We wrote about creditworthiness earlier, so we will only remind you that it also includes the age and marital status of the client, his education, assets, credit history and any banking products that are already charging the household budget. So even if the mandate, work contract or contract does not give us full employee rights, they do not prevent you from applying for a loan or credit. Both in the bank and in the loan company.
Is a loan under a mandate contract possible?
Due to the constant changes on the labor market and the popularity of flexible forms of employment (mandate contract, contract for specific work, contract), the Polish Financial Supervision Authority (KNF) issued a recommendation that banks should treat people working on such principles more gently. Thanks to this, those working on a contract of mandate and having irregular or unstable income can apply for access to banking products on an equal footing with others. Let’s start with the fact that mandate contracts can last as long as employment under an employment contract. The bank will certainly check how long we are already in such an employment relationship.
At mBank or Santander Bank branches, the loan under the mandate contract will be available to anyone who has been employed for at least 6 months. In turn, Alior Bank, ING Bank Śląski and Deutsche Bank require employment for at least 12 months. Credit Agricole is the most restrictive in this respect, as it stipulates that only those who have been working on the commission contract for at least 18 months can apply for a loan. If our working time in a given company is shorter than half a year, it does not mean that everything is lost. In such situations, loan companies come to the rescue, which are much more willing to help their borrowers. Of course, this is done with much higher costs, besides, parabanks lend money for a much shorter time than banking institutions. Although many of them, despite declaring that they do not do so, check their clients in the BIK database, but most often it does not have a major impact on the decision to grant a loan.
A loan based on a mandate contract at a bank or loan company?
The loan company is only interested in timely repayment of liabilities – from where the debtor will take the money for it, it is his individual case. The only interference that we can expect is a reduction in the amount of loan we have applied for. In addition, the whole scheme remains unchanged: we choose the company, submit the application, decide what amount to borrow and for what time, and then we try to comply with the conditions contained in the contract to avoid recovery and enforcement of repayment by the court bailiff.
Applicants for loan companies and working on a commission contract should be interested in the offer of Wongi and Vivus. They have a good chance of getting a positive credit decision from them with minimum formalities. A loan or a loan under a mandate contract does not have to be taken from a bank.
Mortgage and mandate contract
The mortgage is already a much heavier caliber. We must automatically exclude loan companies’ offers because they base their business on borrowing much smaller amounts. Despite employment under a mandate contract, it is not impossible to receive such a loan from a bank, you only need to meet certain conditions. Meticulous documentation, which we can present to a bank employee, plays a very important role here. A current mandate contract is necessary, but it is possible that we will also be asked for the previous ones.
If the withdrawals have been cash so far, not a bank transfer, we will have to provide invoices for the contracts. When we start reviewing the offers of subsequent institutions, armed with a briefcase with documents, we will soon notice that regardless of whether we go to Bank Pocztowy, PKO BP or Getin Bank, employees will be more interested in the amount of income than the type of our contract. This is a difference from mortgages granted to people with an employment contract.