Loan of honor: who is this stranger?
Let’s try to understand together what the loan of honor is and when it can be useful to apply for it, as well as what are the requirements to obtain it.
It is a very particular form of financing : it is a personal loan at advantageous and favorable conditions as regards the repayment of the amount obtained and which allows the applicant easy and immediate access to the capital requested.
In fact, the peculiarity of this type of financing is that it is not necessarily required to demonstrate an income, to present a co-obligor or a guarantor, all of these, essential characteristics that must be present to request and obtain a loan in other conditions.
All types of loan of honor are regulated by legislative decree number 185 of 2000 which basically allocates to this form of financing so-called grants or in any case at a subsidized rate for all those interested in accessing this form of loan, for example to start a company or a new self-employment.
Among the various types of loan of honor there is one reserved for particularly deserving students provided by credit institutions in order to cover all the student’s training expenses guaranteeing the possibility of dedicating themselves exclusively to study and its training path.
Types of Honor Loans: When Can You Apply?
The loan of honor can be requested by different categories of users and depending on the type of loan that is requested, the amount requested and the methods that are agreed for the return of the same, certain requirements are required and some limitations are imposed.
Types of honor loan:
- Student loan : students can apply for a loan of honor in order to cover the costs of their training. As a rule, the amount that is granted is around 5 thousand USD per year. Interest is not charged and the payment of the repayment installments usually starts two years after the end of the studies. This is in order to allow the student an adequate training and a suitable period of time to find a decent job that allows him to steal money to return it to the credit institution. The repayment period can be very varied and range from a very short period of one year and can be extended up to a maximum of 15 years.
- Loan for self-employment, this other type of honor loan is reserved for those who want to start a self-employment activity. In such cases, the amount disbursed can reach up to about 24 thousand USD 8 plus VAT). The sum disbursed is divided into two parts: one funded with a non-refundable fund and one with a subsidized rate.
- Loan of honor for micro-enterprises : this is a third hypothesis of loan of honor. The maximum investment is around 130 thousand USD plus VAT. Also in this part, the amount disbursed is divided into two parts, however equal: 50% of the non-repayable loan and the remaining 50% with the application of a subsidized rate. The interest rate applied is equal to 30 per cent of the rate taken as a reference in force when the contract is signed. Micro-enterprises must have:
– collective name;
– simple company.
- Loan of honor for franchises : Even those who aim to open a business in perfect franchise style, such as those who manage micro-enterprises, can request access to an honor loan. Also in the aforementioned hypothesis, the contribution is disbursed half-way and the remaining half with a subsidized interest rate. Here, too, the repayment times do not normally exceed 7 years with quarterly installments.
Requirements and procedures for requesting the honor loan
Anyone wishing to apply for a loan of honor for work-related activities (both for micro-enterprises and for franchising or for starting up a self-employed activity) must possess certain requirements, first of all being of age, and must also certify the his status as unoccupied at the time of the loan application.
Others must be certain that they have been resident in Italy for at least six months. In the case of franchises or micro-enterprises, the aforementioned requirements must be possessed by at least half of the members of the business.
Different, however, the requirements required for students who must be resident in Italy and study at a university of the Italian state.
In addition, the student must possess the income and merit requirements set out in the regulatory framework contained in law number 390 of 1991. In the event that the student defects certain requirements, he / she will not be able to access the loan.
In order to take out this loan, a specific procedure must be followed. Special agreements between universities and banks can be exploited.
Students can contact the secretariat of their university to find out about the affiliated banks, this aspect is very important because the parameters can change from banking institution to banking institution, therefore the verification must be done carefully in order to present all the documents and requirements required.
As regards the loan of honor for business purposes (i.e. in cases of micro-enterprise, franchising or self-employment), the loan is disbursed and managed by the company Invitalia Autoimpiego. The application to access this type of loan can be submitted directly online.
In some cases, the honor loan can be financed by other entities. Consider, for example, the loans that are granted by local authorities such as the Region or the Municipality.
In this case, the requirements and types of loan made available by the institutions must be ascertained, after which the application can be forwarded on the basis of what is indicated in the notice.
In the case of loans that are granted by local authorities, a series of limitations may be imposed. In particular, as regards the number of loans made available.
The loan of honor is generally granted to young people between 18 and 35 years old. We also remind you that in the case of business, micro-enterprise or franchising, the new company to be opened must be strictly based in Italy, since the possibility of obtaining an honor loan in order to open a new company abroad is not granted, albeit in the European Community.
The loan of honor cannot be used to finance business activities that are not aimed at creating a new area of commerce, services or goods. Furthermore, one must be willing to maintain the business activity for at least five years and the person applying for the loan of honor must undertake not to accept any permanent employment contract.
The deadline for applying for the honor loan can last up to 60 days. During this period, the preliminary investigation is completed and the financing procedures are initiated after verifying the existence of all the requisites and characteristics required and necessary for the purposes of the disbursement itself.