Credit despite parental leave
Lovers who have recently become parents may wish to take out a loan despite parental leave. When a child is expected or born, many purchases must be made. The nursery needs to be set up, strollers, clothes and baby boarding equipment must be provided. If you do not have sufficient savings to finance these things, you may want to take out a loan despite parental leave. Further editorial at bureauboth.com
Is it possible to take a loan during parental leave?
Basically, parents receive a parental allowance that is 65% of their net income. This means that income does not differ so much from other income during parental leave and many parents assume that a loan should be possible despite parental leave. However, there are some banks that do not consider parental leave as income and therefore do not want to provide credit during parental leave.
The opportunity for a loan is usually only given if the partner, who is not on parental leave, has a sufficiently high income and the loan can be secured. However, the bank often lacks the second income. The parental allowance can often not replace the regular income from the Bank’s point of view, as this is temporary. Following the parental allowance, a parent often takes parental leave and household income continues to decline. Banks therefore see increased risk in lending during parental leave.
Small loans are sometimes possible
Banks also see increased risk in lending during parental leave because not everyone returns to work immediately after parental leave. Banks therefore often grant a loan during parental leave only with a very short term. This means that the loan must still be paid off during parental leave. Frequently, only small amounts of credit are offered for this reason. Young parents should be careful when looking for a loan to avoid being over-indebted. If a loan is taken despite parental leave, the repayment rate must fit comfortably into the budget.