Children put a cost burden on the household budget, but child support and other wage replacement benefits, such as parental allowance, are not part of garnishable income. When it comes to a loan for young families, it is not generally easier, because children living in the household tend to negatively affect the credit rating.
Credit for families with children
To get a loan with children, you must be able to prove a correspondingly high income.
Even if the state pays child benefit to the parents and the child benefit for one child is already almost 200 euros, this does not change the situation because the child benefit is not added to the income. It is particularly difficult for single mothers to obtain a loan, as they often receive child support in addition to their child allowance. Also, the father's maintenance payments for the child and the mother are not garnishable income, so that a loan is often only approved if a solvent guarantee goes with in the contract.
Even large families, whose family budget is often not so bad because of the child benefit, have bad cards when they apply for a loan for large families. There is no family bonus. Families with many children can only get a loan if they have the economic capacity to pay. The child benefit is not taken into account. However, the children in the household are taken into account in the household calculation. Loan for mothers and fathers is therefore not so easy to get. A loan with child support as the only income is not possible at all. If young families want to borrow, they must be able to prove income in the appropriate amount.
Is there the credit in parental leave?
Young families who have just had a baby are much better off in terms of income than was the case a few years ago. Today, there is the parental allowance, which offers young parents financial compensation when they are temporarily not working because they devote themselves to raising children. However, it is not easier to get credit in parental leave, because the parental allowance is not garnishable income.
It is paid only over a limited period and, whether the mother or father after parental leave is again fully employed, is in the stars. At least that's how banks see it when a loan is applied for with parental benefits. Young parents can only get a loan despite parental allowance if one parent can prove a correspondingly high income.
If young parents already have current credit obligations
There is a reason why banks are so strict in their lending guidelines. Again and again the experience is made that it is difficult for some young parents to service their current loan despite parental leave. Often installment deferrals or debt rescheduling are requested to reduce the monthly burden. The fact is that despite the state support through parental allowance and child benefit, the monthly burden of a family with children increases and the income decreases in real terms.
Credit during pregnancy
Today there is the Internet and whoever applies for an online loan is not asked whether there is a pregnancy – yet – perhaps it should be said. If young pregnant women apply for a loan and have a clean credit history and can prove a regular income, they will get the loan during pregnancy. They should only be aware that even after that they must be able to service the loan every month. Who takes out a loan during pregnancy, should therefore calculate very carefully whether the installments can be paid even with lower income. The same applies, of course, to the period of maternity leave. If a loan is applied for despite maternity leave, no problem arises as long as an earnings statement can be presented.
In principle, expectant parents who are employed are recommended 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 once the child is born and no proof of income can be provided, it becomes much more difficult to get a loan.