Women and men who take parental leave are not employed and take care of their children for most of the day. The parental allowance is granted for 12 months and currently corresponds to 67 percent of the last salary – however, the lack of income is noticeable in many households.
Larger purchases usually cannot be made during parental leave. For this reason, many parents try to get a loan during parental leave in order to have fewer financial problems. Unfortunately, borrowing during parental leave is not easy because most banks do not consider parental allowance to be income.
What difficulties can there be in borrowing?
Even if the parental allowance is theoretically an income, the banks rate it differently. The reasons for this lie in the payment period of 12 months and the uncertain future. After all, no one can know whether the parents can return to their old job after the end of parental leave and can easily repay the loan. If you still want to take out a loan during parental leave, you have several options. Most banks will grant you a loan if you meet one or more of the following requirements:
- Your working partner has a high income and could pay back the monthly installments without your earnings.
- You have sufficient collateral (eg home or property) or appoint a guarantor worthy of credit.
- The loan amount is low and the monthly installments are manageable. The chances of a small loan with a short term are also relatively high during parental leave.
Credit comparisons are worthwhile
If your house bank rejects your loan application or offers you very disadvantageous conditions, you should look for offers on the Internet. Most of the time, direct banks give you a better chance of getting a loan during parental leave. It is important that you pay attention to favorable interest rates and advantageous conditions when comparing the offers. Don’t overwhelm yourself with high monthly installments or short terms – if you have your finances under control, you won’t get into debt. As you can see, it is also possible to get a loan during parental leave. If you meet one or more requirements, you don’t have to do without anything even without a fixed income.