The birth of a child is not only a joyous event, but also leads to a high financial burden in most cases. In the early years of life, one parent usually stays home to take care of the newborn.
Credit despite parental allowance
Of course, that means a salary to care for the entire family. In the first year, newly-minted parents receive parental allowance, which currently amounts to 67 percent of their current income. At the end of this period you can return to the old job or stay at home with the child. If you have to make a major purchase during the parental allowance period and you do not have enough funds, you can take out a loan despite parental benefit.
What obstacles are there on the way to credit despite parental allowance?
Although the parental allowance is a kind of income for you, it is not rated as such by the banks. Since the parental allowance is granted only for 12 months and corresponds to a fraction of your previous income, it is equated with the receipt of unemployment benefits or other social benefits. After all, the lending bank can not be sure that you will return to your old job after the parental allowance period and thus ensure a regular income. However, if you have collateral (eg your own house or an expensive car) or your partner earns a lot, the loan will not be a problem despite parental benefit.
How can you increase your chances of getting a loan despite parental benefit?
As mentioned earlier, tangible assets or a high income of the partner are important collateral that can help you in lending. Apart from that, it makes sense to borrow small sums of money during parental leave, where the risk of default is not too high. Small loans up to 5,000 euros are granted to you rather than long-term mortgage lending, which amounts to dizzying amounts. If you are a single parent and do not have adequate collateral, the loan can be difficult despite parental allowance. In this case, it is helpful to be able to name guarantors who step in for you in the event of insolvency.
Compare offers worthwhile
Since the funds are already scarce during parental leave, you should also save as much as possible when borrowing. On the Internet, you can compare the offers of various online banks and find out which loan is best for you. Do not be fooled by a favorable interest rate – advantageous conditions such as long terms and low monthly payments are just as important.