- Credit

Credit despite parental allowance

As a wage replacement benefit, the parental allowance enables parents to give up all or part of their employment in the first fourteen months of their child’s life. Its amount is based on the previously earned income and, depending on the amount, is between sixty-seven and one hundred percent of the amount to be offset. In addition, the Parental Allowance Act provides for a minimum benefit and a maximum amount.

Why banks are reluctant to provide parental allowance

Why banks are reluctant to provide parental allowance

In the opinion of many parents, it should be easy to take out a loan despite parental allowance, since after receiving parental allowance, earned income is revived. However, most credit institutions do not take into account later wages, especially as there is the option of reducing working hours or giving up work after receiving parental allowance. In addition, some banks generally do not count wage replacement benefits as income in the sense of the household account due to their time limit.

The chances of getting a loan despite receiving parental allowance increase if the applicant has already concluded an agreement with the employer about the future employment relationship and presents it to the bank. If the partner has a job, ideally the borrowing is done by both parents during parental leave.

Since additional expenses are easily incurred during the first months of the child’s life and parents-to-be often plan their parental leave early, the need for a loan despite parental allowance can often be avoided by applying for it in the first weeks of pregnancy and backing it up with full earned income. To ensure that repayment is successful, borrowers pay attention to sufficiently low monthly installments, which can also be paid with parental allowance.

Take out a personal loan with parental allowance

Take out a personal loan with parental allowance

Despite the parental allowance, it is easy to take out a loan via websites for arranging private loans, since the private lenders registered there support young parents for social reasons by subscribing to a loan request. On the corresponding Internet portals, only the members registered as lenders decide which projects they are granting a loan for. A detailed description of the personal and financial situation increases the likelihood of receiving the desired amount as a personal loan.