In mid-September, the government announced a previously unseen type of loan, the worker’s loan, which young people can take advantage of. This article dives into the details of this loan, its purpose, and how it can be used in the best possible way.
The employee loan provides young people (aged 17-25) with an interest-free loan of up to HUF 4 million (<$#x20B0 4%$), available to those who have an employment relationship or business of at least 20 hours per week and have worked in Hungary for 5 years. The term of the loan is ten years, which means a monthly payment of only HUF 33,333 for the maximum amount of four million will be HUF 33,333 (). The loan repayment can be paused for two years after the birth of each child, and half of the debt will be forgiven after the birth of the second child.
This loan can be a blessing and a curse at the same time. If used irresponsibly, it can burden young adults with a ten-year financial obligation. However, if used wisely, it can provide significant support and potentially double the loan amount through investment.
The article compares investing the employee loan in different products:
1. Risk-free government bond: Investing in government securities, such as FIXMÁP, is a low-risk option with an annual yield of 6.5%. For an investment of four million forints, this would result in 7.5 million forints at the end of the ten-year term.
2. S&P 500 stock index: Investing in stock market indices, such as the S&P 500, can result in a substantial return. Historical data suggests that an average annual return of 10.5% could be achieved, resulting in an investment of approximately 10,850,000 forints by the end of the term.
3. Buying a home: As of 2024, the Hungarian government allows granting loans with 10% self-reliance for buying a first home for people under 41. With a maximum HUF 40 million apartment and using 90% of the market value as a loan, a monthly installment of HUF 300,000 is possible with the combined payments of the employee loan and housing loan.
In conclusion, the employee loan offers young people a significant opportunity for financial growth and development if handled responsibly. It allows them to invest in their future, starting a business or paying off existing debts. Just like any loan, it must be considered with careful research, financial planning, and suitable income sources.
<p>The post Work Loan Details: Hungary’s New Initiative Offers Financial Support first appeared on CoinBuzzFeed.</p>
