Although young people are urgently needed, it is not exactly easier for young parents and families to get a loan if children live in the household.
Children burden the household budget, but child benefit and other wage replacement benefits, such as parental allowance, are not included in the attachable income. When it comes to a loan for young families, it doesn’t get any easier, because children living in the household tend to have a negative impact on creditworthiness.
Credit for families with children
In order to get a loan with children, you have to be able to prove a correspondingly high income.
Even if the state pays child benefit to parents and the child benefit for a child is almost USD 200, this does not change the situation because child benefit is not added to income. It is particularly difficult with a loan for single mothers, who often receive maintenance in addition to child benefit. The father’s maintenance payments for the child and mother are also not attachable income, so that a loan is often only granted if a solvent guarantee is included in the contract.
Large families, whose family budget is often not that bad due to child support, also have bad cards when they apply for a loan for large families. There is no family bonus. Large families can only get credit if they are economically efficient. Child benefit is not taken into account. However, the children in the household are counted towards the household bill. Loans for mothers and fathers are not so easy to get. A loan with child benefit as the only income is not possible at all. If young families want to take out a loan, they must be able to prove the corresponding amount of income.
Is there parental leave credit?
Young families who have just had children are now much better off in terms of income than was the case a few years ago. Today there is parental allowance, which offers young parents financial compensation if they are temporarily out of work because they are dedicated to bringing up children. However, it is not easier to get credit on parental leave because parental allowance is not a attachable income.
It is only paid for a limited period of time and it is in the stars whether the mother or father will be fully employed again after parental leave. At least that’s how the banks see it when a loan with parental benefit is applied for. Young parents can only get a loan despite parental allowance if one of the parents can prove that they have a correspondingly high income.
When young parents already have ongoing loan commitments
The guidelines for lending are not so strict at banks for a reason. Time and again it is found that some young parents find it difficult to service their current loan despite parental leave. Installment deferrals or debt rescheduling are often applied to reduce the monthly charge. It is just the case that despite the state aid through parental allowance and child benefit, the monthly burden on a family with children increases and income actually decreases.
Credit during pregnancy
Today there is the Internet and if you apply for an online loan you will not be asked whether you are pregnant – not yet – you should say. If young pregnant women apply for a loan and have a clean Credit Bureau and can prove a regular income, they will also get the loan during pregnancy. You should only be aware that afterwards you must be able to service the loan every month. If you take out a loan during pregnancy, you should therefore calculate very precisely whether the installments can also be paid with a lower income. The same naturally applies to the period of maternity leave. If a loan is applied for despite maternity leave, there is no problem as long as a pay slip can be presented.
In principle, parents-to-be who are working are advised to plan exactly to what extent credit will still be needed in the near future. It can make sense to apply for a loan at this stage, because when the child is just born and proof of income can no longer be provided, it is much more difficult to obtain a loan.