A family loan will only be granted if the monthly payments are not a problem and the family’s financial situation is in order. In general, the credit for families helps to improve a household budget, which is often low, and to make important purchases afterwards. It is often the case, even if only temporarily, in families that the woman takes care of the upbringing of the children and the man is the sole breadwinner. This means that only one income is available for three or more people.
There is also no special government funding for young families, which means that the families themselves have to get by. In general, however, it is very difficult to forego today’s consumer society, which means that family loans are often the only way to get something like a home or a car.
The creditworthiness for a family loan
If the families apply for a loan, the two partners should do it together. Even if the woman is currently not receiving any income, a low income or parental benefit. Compared to a bank, this often leaves a better impression. For many banks, parental allowance is a wage replacement benefit and is therefore not counted as wages after the payment period is limited. Thus, the main earner’s income must be sufficient to pay the rent, take care of the family, meet the obligations and repay the loan installments. Since many young fathers usually do not yet have management positions, none of this works because of the income. A family loan is often not granted after the conditions are not right.
If a family cannot service a family loan financially, they have a problem. Most of the families have no experience with loans and can therefore misjudge their financial situation. Many plans, for example, that the woman will work again in a year. At this point a lot can come up, for example another child. Young families should therefore take a back seat financially and pay more attention to the household budget.
General information about family loans
Many families have neither much money saved nor financial reserves available. With sufficient collateral and a good credit rating, however, a loan is easily possible. The chances of a permit are relatively slim if there is a negative credit entry. Most banks scrutinize a loan application very carefully and do not want to take any risks.
A permanent employment relationship is very beneficial and the last three salary statements serve as security. Generally speaking, the shorter the term of a loan, the lower the interest rate.